IEA source: Peak Oil is here

[mesyn191]

Re: IEA source: Peak Oil is here

There is an "As Advertised On TV" plastic hanging gadget that allows you to grow tomatoes in tremendous quantities hanging plants upside down on a balcony with an almost hydroponic method.... A few friends in the far north, where such things should fail, report astounding success and lament that they cannot buy yet more of the product. Next year, my deck will be a test site for the product

These things do work great, buying them online or from the TV ad is a laughable rip off though. You can make one with a 5 gal. bucket for $3. Less if you've got some buckets lying around or know someone who does. They're much more durable than the Topsy Turvey's too. Just be aware to plan ahead when you set them up, since one you put the soil/water in them they become a major PITA to move. Large hanging plants can easily weigh 60lbs or more like that.... Also make sure to cover the tops with a lid to reduce water evaporation, but don't seal them all the way so the soil can aerate.

http://www.gardeningknowhow.com/urba...-gardening.htm

http://www.gardeningknowhow.com/urba...pside-down.htm

[Jay]

Re: IEA source: Peak Oil is here

My Topsy Turvey grew the best tomatoes we got this year. Agreed, it is a major pain to move though when full of soil.

[ggirod]

Re: IEA source: Peak Oil is here

You can make one with a 5 gal. bucket for $3.

Thanks for the great suggestion - I will think of you next summer as I sit on my deck slicing and eating my fresh tomatoes.

[mooncliff]

Re: IEA source: Peak Oil is here

World map showing proven reserves.

http://www.guardian.co.uk/news/datab...zoomed-picture

http://www.guardian.co.uk/news/datab...l-iea-uppsala#

[Rajiv]

Re: IEA source: Peak Oil is here

Colin Campbell's response to the Guardian article

Colin Campbell
Ballydehob,
Co Cork,
Ireland.
aspotwo@eircom.net
Comment Editor
The Guardian

Dear Sir,

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.

I can provide you with some more information on the topic, touching on my own experience. I first became aware of the issue in 1969 in Chicago when I was part of a team making a world evaluation for Amoco (now part of BP). Later when I was managing Fina in Norway, I had the company sponsor a research project on the subject with the Norwegian authorities. We used public reserve data, as I had not then appreciated how unreliable they were.

The results were published as The Golden Century of Oil 1950-2050 (Kluwer Academic). This attracted the interest of Petroconsultants, a company based in Geneva that was used by the international oil companies to assemble a valid database on oil activities around the world including the size of discoveries and drilling statistics. They invited me to redo the study but this time using their comprehensive database of virtually all the world’s fields. I was joined in this project by Jean Laherrère, formerly Exploration Manager of the French oil company TOTAL, who had developed various analytical techniques. The resulting study was published at $50 000 a copy, but was later suppressed under pressure from a major US oil company, which had better remain nameless. However, Petroconsultants co-published a book, The Coming Oil Crisis (Multi-Science), which I wrote summarising the results, and also agreed that Laherrère and I should accept an invitation to write an article for the Scientific American : The End of Cheap Oil (March 1998).

The IEA purchased this book and contacted me, sending an analyst to spend a week going through the data. It was evident that the team within the IEA working on the subject was fully convinced and saw its importance. They then produced a report for the G8 Ministers, meeting in Moscow (International Energy Agency, 1998, World Energy Prospects to 2020; Report to G8 Energy Ministers, March 31 www.iea.org/g8/world/oilsup.htm). The text was bland enough but it contained a critical table showing that oil demand would outpace supply by 2010, save for the entry of an item called Unidentified Unconventional, whose supply was shown to meet as much as 20% of the world’s needs by 2020. Having managed to get it past the G8 Ministers, the IEA team was able to include it in the World Energy Outlook for 1998.

In effect, the Unidentified Unconventional was a coded message for shortage. I explained this to a journalist who contacted the element within the IEA which was pleased that this important hidden message should get out. But when it was published (Fleming D., 1999, The next oil shock? Prospect April), the IEA evidently got into serious trouble with its masters in the OECD governments, and in the next issue of the World Energy Outlook, the Unidentified Unconventional became Conventional Non-OPEC, without comment or explanation.

The primary function of the IEA was to supervise OECD strategic stocks, which in turn were perceived to be a certain defence against any excessive demands by OPEC. So the IEA came to see its role as protecting consumers’ interests, and it therefore had every reason to downplay any notion of depletion and finite limits imposed by Nature, because indirectly such would strengthen the hand of OPEC.



Petroconsultants was subsequently acquired by IHS in the United States, and the special relationship with the international oil companies was lost, affecting the quality of the data. It may also have found itself under pressure from commercial interests and the principal OPEC countries.
It is worth commenting briefly on the reporting of reserves. There is no particular technical difficulty in assessing the size of an oilfield early in its life, although naturally there is a certain range in the estimates. The reporting of the reserves has however been subject to two main distortions.

First, the oil companies were subject to strict US Stock Exchange rules designed to prevent fraudulent exaggeration. It made sense therefore for them to report the minimum needed for financial purposes, and then revise the estimates upwards over time, giving a comforting, if misleading, image of steady growth.

Second, the OPEC countries found themselves competing for quotas in the 1980s when prices were low. Quota was based on reported reserves, which prompted Kuwait to add 50% overnight in 1985 although nothing particular had changed in the oilfields. It may in fact have started reporting total found, not remaining reserves. The other OPEC countries later reacted with invalid increases to protect their quota (see table). To imagine that new discovery should exactly match production in Abu Dhabi to leave unchanged reserves is clearly absurd.

Despite these difficulties, it is possible to make a reasonable assessment of the situation starting with the sound historical data from Petroconsultants. The following graph shows my current assessment.



Briefly, Regular Conventional Oil peaked in 2005. The shortfall was made good by expensive oil mainly from deepwater fields and Canadian tarsands, which led to rising prices. This trend was spotted by shrewd traders who started buying contracts on the Futures Market, while the industry maintained high levels of storage, watching it appreciate in value at no cost or effort. The rising prices also delivered a flood of petrodollars to the Middle East where it still costs on average about $10 to produce a barrel. The surplus was in turn partly returned to Western financial institutions, contributing to their instability. The surge in price reached extreme levels in mid 2008, approaching $150 a barrel, which prompted the shrewd traders to start selling short on the Futures Market and for the industry to start draining their tanks before they lost value. The high prices in parallel triggered an economic recession which dampened demand causing prices to fall back to 2005 levels before edging up to around $75 today.

It is more difficult to evaluate the Non-Conventional oils, comprising tarsands and heavy oils, deepwater oil, Polar oil and Natural Gas Liquids, but the above graph suggests that the peak of all categories was passed in 2008. A debate rages as to the precise date of overall peak but rather misses the point when what matters is the vision of long decline on the other side of it.

Given the central role of oil in the modern economy, the peak of production promises to be a turning point of historical magnitude. It seems that banks have been lending more than they had on deposit, confident that Tomorrow’s Economic Growth was collateral for Today’s Debt, without recognising that the expansion was fuelled by cheap oil-based energy. The Governments are now printing yet more money under Keynesian principles in the hope of restoring past prosperity, which may meet with a brief success. But if it does, it would stimulate the demand for oil that would again soon breach the supply limits, leading to another price shock and an even worse consequent economic depression. In fact, today 28 billion barrels a year support a world population on 6.7 billion people, but by 2050 the supply will have fallen to a level able to support less than half that number in their present way of life.

There is a great deal that can be done to reduce waste and bring in renewable energies. Coal and nuclear power can also ease the transition although they are themselves also subject to depletion. The challenges are however great, and it is clear that governments must move urgently to prepare for what unfolds. In parallel come the challenges of climate change that are to a degree related to oil supply.

There may well now be a certain awakening, and the OECD governments may begin to seek an umbrella under which to introduce new national policies. This may in turn allow the IEA to come forward with more realistic assessments of the true situation. The media too has an important role to alert people at large of what unfolds. It underlines the value of the article you have published for which you deserve every credit.

Even said!
Yours sincerely,
C.J.Campbell

Using the highlighted sentences as a jump of point, I would like to bring in a few more articles.

Michael Brownlee's article - TRANSITION: Meeting the Challenge of Energy Descent

Our Predicament

It’s become axiomatic that, like it or not, we will be facing a future with ever less energy. But what does this “Energy Descent” mean, exactly? And how do we prepare?


Richard Heinberg has been fairly specific about the dimensions of the challenge. He estimates that due to fossil fuel depletion and decreasing exports we could easily see a 25-40% decline in available energy over the next two or three decades. He calculates that in but a very few nations probably no more than 25% of the energy currently being consumed could be replaced by alternative/renewable sources by 2030. So for fossil fuel importing nations like the U.S., says Heinberg, it would be prudent to anticipate and plan for at least a 25% decline in total energy by that time. That would certainly change the face of modern society!






But with the energy revolution green-shooting all over the planet, won’t alternative sources of energy quickly replace the oil we’re using? No, suggest scientists at Stanford Research Institute, who noted that the 83 million or so barrels of oil we’re burning every day to run the world adds up to just about one cubic mile of oil (CMO) per year. An enormous amount of energy is embedded in all that black liquid!


So what would it take to replace the oil we currently use? The SRI researchers say that to finally achieve that much energy output, every year for fifty years in a row we’d need to build the equivalent of four Three Gorges Dams (still the largest construction project in human history). Or bring 52 nuclear power plants online every year for fifty years. Or launch 104 coal-fired power plants every year for fifty years. Or, if you’d prefer a “cleaner” approach, we’d need to install 91 million solar panels or 33,000 wind turbines a year for fifty years in a row.


From this perspective we can say that certainly there will be alternatives to oil, but they are not likely to come on stream quickly enough or at large enough scale to maintain our current way of life. Gulp!
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Also Richard Heinberg's article - Temporary Recession or the End of Growth?

Everyone agrees: our economy is sick. The inescapable symptoms include declines in consumer spending and consumer confidence, together with a contraction of international trade and available credit. Add a collapse in real estate values and carnage in the automotive and airline industries and the picture looks grim indeed.

But why are both the U.S. economy and the larger global economy ailing? Among the mainstream media, world leaders, and America's economists-in-chief (Treasury Secretary Geithner and Federal Reserve Chairman Bernanke) there is near-unanimity of opinion: these recent troubles are primarily due to a combination of bad real estate loans and poor regulation of financial derivatives.


This is the Conventional Diagnosis. If it is correct, then the treatment for our economic malady might logically include heavy doses of bailout money for beleaguered financial institutions, mortgage lenders, and car companies; better regulation of derivatives and futures markets; and stimulus programs to jumpstart consumer spending.


But what if this diagnosis is fundamentally flawed? The metaphor needs no belaboring: we all know that tragedy can result from a doctor's misreading of symptoms, mistaking one disease for another.
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To be sure: the Conventional Diagnosis is clearly at least partly right. The causal connections between subprime mortgage loans and the crises at Fannie Mae, Freddie Mac, and Lehman Brothers have been thoroughly explored and are well known. Clearly, over the past few years, speculative bubbles in real estate and the financial industry were blown up to colossal dimensions, and their bursting was inevitable.
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A case can be made that dire events having to do with real estate, the derivatives markets, and the auto and airline industries were themselves merely symptoms of an even deeper, systemic dysfunction that spells the end of economic growth as we have known it.


In short, I am suggesting an Alternative Diagnosis. This explanation for the economic crisis is not for the faint of heart because, if correct, it implies that the patient is far sicker than even the most pessimistic economists are telling us. But if it is correct, then by ignoring it we risk even greater peril.


Economic Growth, The Financial Crisis, and Peak Oil
For several years, a swelling subculture of commentators (which includes the present author) has been forecasting a financial crash, basing this prognosis on the assessment that global oil production was about to peak. (2) Our reasoning went like this:



Continual increases in population and consumption cannot continue forever on a finite planet. This is an axiomatic observation with which everyone familiar with the mathematics of compounded arithmetic growth must agree, even if they hedge their agreement with vague references to "substitutability" and "demographic transitions." (3)



This axiomatic limit to growth means that the rapid expansion in both population and per-capita consumption of resources that has occurred over the past century or two must cease at some particular time. But when is this likely to occur?


The unfairly maligned Limits to Growth studies, published first in 1972 with periodic updates since, have attempted to answer the question with analysis of resource availability and depletion, and multiple scenarios for future population growth and consumption rates. The most pessimistic scenario in 1972 suggested an end of world economic growth around 2015. (4)


But there may be a simpler way of forecasting growth's demise.


Energy is the ultimate enabler of growth (again, this is axiomatic: physics and biology both tell us that without energy nothing happens). Industrial expansion throughout the past two centuries has in every instance been based on increased energy consumption.(5) More specifically, industrialism has been inextricably tied to the availability and consumption of cheap energy from coal and oil (and more recently, natural gas). However, fossil fuels are by their very nature depleting, non-renewable resources. Therefore (according to the Peak Oil thesis), the eventual inability to continue increasing supplies of cheap fossil energy will likely lead to a cessation of economic growth in general, unless alternative energy sources and efficiency of energy use can be deployed rapidly and to a sufficient degree. (6)


Of the three conventional fossil fuels, oil is arguably the most economically vital, since it supplies 95 percent of all transport energy. Further, petroleum is the fuel with which we are likely to encounter supply problems soonest, because global petroleum discoveries have been declining for decades, and most oil producing countries are already seeing production declines. (7)


So, by this logic, the end of economic growth (as conventionally defined) is inevitable, and Peak Oil is the likely trigger.
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The above article is quite long, but a good read nevertheless.