Peak Oil News: 07/01/2004 - 08/01/2004

Tuesday, July 13, 2004

No new reports here until mid August

Gone mountain climbing.

Update: My first, and last, mountain climb on a tall mountain was not completed due to HAPE - high altitude pulmonary edema.

Now that I am back to earth, I will resume collecting peak oil news stories.


Monday, July 12, 2004

Break the Chain of America's Oil Dependance

NRDC

It's time to Break the Chain -- the chain of America's dependence on oil. How? By building better, cleaner, and more efficient cars, right here in America -- cars that save energy, cost less to operate, protect the American economy, drastically cut down on smog and global warming pollution, and promote America's energy security. (See NRDC's July 2004 fact sheet for in-depth information.)

Q: My car gives me the freedom to get around, so what do you mean when you say break the chain?

A: The United States' dependence on oil, much of it imported, chains the nation's economy, security, and even foreign policy. That chain needs to be broken, and the most direct and effective way to do that is to encourage American automakers to harness existing technology to build more efficient automobiles. We use far more gasoline than we have to, because our cars, SUVs, minivans, and pickup trucks waste it. And it's not that more efficient technology doesn't exist; it does. It's that instead of applying available technologies to improve gas mileage, Detroit is intent on sticking to business as usual. By doing that they're costing consumers more money in fuel, causing more smog and global warming pollution, and making Americans and the American economy ever more dependent on oil.

Q: It seems like cars are getting better and more efficient every year. Aren't they?

A: Not in terms of gas mileage -- average fuel efficiency in the United States dropped between 1988 and 2000, despite significant advances in engine technology. The reason is that SUVs don't have to meet the same fuel efficiency standards as other cars, so Detroit has devoted the benefits of added engine efficiency to supporting heavier and heavier vehicles. We need to do better than that because our dependence on oil, the majority of it from overseas sources, makes us economically vulnerable to the whims of oil producers.

Q: Won't new vehicle technology take years to develop? Or worse, is this just pie in the sky?

A: No. According to the National Academy of Sciences, existing technology is already on hand that can drastically increase fuel efficiency -- so much in fact that within 10 to 15 years, the average new vehicle could get nearly 40 miles to the gallon, without sacrificing vehicle performance or safety. Other analysts say the potential is even greater. And research is ongoing, so future technological advances will only improve mileage.

Q: What kind of technology are we talking about here?

A: Lots of things, some easy to understand by non-engineers, some much more complicated. They include variable valve control engines like the ones Honda uses on its VTEC engine -- the engine that lets Honda lead the pack in mileage; lightweight aluminum engines like the ones used on some Chevy Cavaliers and Oldsmobile Aeros; five-speed automatic transmissions like the ones offered on the Ford Explorer; and lightweight -- but still sturdy -- aluminum or high-strength steel that is just as safe or even safer than existing materials. Ford has successfully tested the design, and Volvo and Audi have already gotten it to market. These are improvements to conventional vehicles. But a whole new type of vehicle takes fuel savings even further -- gasoline-electric hybrids, which combine a gasoline engine with an electric motor. Hybrid sedans get about 50 mpg. Toyota and Honda already have hybrids on the U.S. market.

Q: Will more efficient cars be less safe?

A: Not at all. Safety is a function of good design, not vehicle weight. Although auto companies use safety as a marketing point for SUVs, in fact SUVs are on average less safe than midsize cars, and they're three times more likely to roll over than regular cars, according to the head of the National Highway Traffic Safety Administration. The Honda Civic, a compact car, is one of the safest cars on the road (the Honda Civic is now available as a hybrid). With better rules for safety and fuel economy we could enhance both at the same time.

Q: If the point is to stop using so much foreign oil, can't we just increase American oil production?

A: No, because the United States doesn't have nearly enough oil, and what we do have is very costly to extract. We import more than half our oil, and drilling more domestically won't keep that figure from going higher because most of the world's low-cost oil reserves are in the Persian Gulf. Companies like ExxonMobil or Conoco spend roughly $6 to $8 to produce a barrel of oil from the Gulf of Mexico or the North Sea, while oil producers in Saudi Arabia or Kuwait spend $1 or less. The Bush administration portrays drilling in Alaska's Arctic National Wildlife Refuge as the answer to our problems. But drilling the refuge, besides destroying critical wildlife habitat and creating an environmental mess, would be very expensive. And in the end, the Arctic Refuge doesn't contain anywhere near enough oil to make a lasting difference -- oil from the refuge would take 10 years to reach market and would likely equal just a six-month supply before running out. The only way to break the chain of our dependence on oil is to use less. And that means that Detroit has to make efficiency an engineering priority, not just a sales pitch.

Q: Cars create global warming pollution. Shouldn't we tackle that problem first?

A: Breaking the chain of oil dependence will also help fight global warming, because carbon dioxide, the main heat-trapping gas causing temperatures to rise, is caused by burning fossil fuels, including oil. So cars that burn less oil also create less global warming pollution.

Q: What happens if Detroit just keeps doing what it's doing?

A: That's definitely what U.S. automakers want to do. They've been lobbying hard -- and successfully -- against raising fuel efficiency. Their business-as-usual stance costs us dearly, both financially and security-wise. American drivers used more than 120 billion gallons of gas in 2002, at a cost of $186 billion. If fuel economy doesn't improve, fuel use for passenger vehicles will increase more than 50 percent by 2020, to almost 190 billion gallons per year. And the amount of oil we import will rise as well, from half to nearly two-thirds.

We can't afford to let that happen. So we need to use our consumer power to persuade the Big Three automakers to start using their know-how to make better, more efficient, safer, cleaner and less gas-guzzling vehicles. And more than that we have to use our political power to get our elected leaders to press Detroit for change.

Ready to help break the chain? | Send a message now - Click here!


Sunday, July 11, 2004

Days are numbered for plentiful oil supply

Pantagraph.com

The late M. King Hubbert was a visionary in the world of oil and, accordingly, he was either revered or reviled. Then he was forgotten. Now, in a time of oil shortage, some economists are taking a furtive look as his work.

A geophysicist at Shell Oil and later at the U.S. Geological Survey, Hubbert had the temerity back in 1956 to suggest that the days of plentiful oil were numbered. He more or less accurately predicted when production in the contiguous 48 states would begin to decline, and he was skeptical that the world could go on consuming oil indefinitely.

Hubbert was discounted by some in oil who believed that the industry, unfettered by government restraint, could produce domestically and internationally an almost infinite supply of oil.

Conservative economists of the supply-side school had no time at all for Hubbert. They believed that oil supply was a function of price and government restriction and that if the price was right and governments were held at bay, oil would gush.

Throughout the 1980s and 1990s, it appeared that they were right, as new fields came on line and improved technology increased the extraction rate. The Southern Hemisphere began to yield some oil, while the North Slope of Alaska and the North Sea were small but rich bonanzas. Hubbert seemed to have gotten it wrong.
But the same new technologies that have produced two decades of plenty may, in fact, be pushing us to the peak of Hubbert's pimple.


Alaska's economy fueled by more than just oil

The Seattle Times

The North Slope oil fields remain a cornerstone of the economy. Prudhoe Bay fields — drilled on subsurface lands owned by the state government — spin off taxes and royalties that fund 80 percent of state government. New fields continue to be added to the original gushers, helping the state maintain the flow of oil through the Trans-Alaska Oil Pipeline at slightly less than a million barrels a day. That's down from the peak of more than 2 million barrels a day in the 1980s.


Saturday, July 10, 2004

U.S. must get busy finding alternatives to crude oil

The Decatur Daily

Fuel prices are falling, but the recent price peak may just be a glimpse of what the future holds for Americans who continue their love affair with large, powerful gas guzzlers.

When fuel costs rise, it's always appropriate to bring up the need for more research into alternative fuels, including one Valley farmers could make a few dollars from.

Most drivers are familiar with gasoline that contains alcohol made from corn. It's been available for years, but not much has been done because fuel prices have remained relatively low. Another biofuel that needs more attention comes from soybeans, also a crop grown here in the Tennessee Valley.

Soybeans are an ingredient used in bio-diesel fuels. They seem to work well, and the 1 or 2 cents more per gallon cost is usually offset by a slight increase in fuel mileage.

A blend of bio-diesel called B20 is being sold this summer in North Dakota. It's the first time the blend of 20 percent bio-diesel fuel and 80 percent petroleum has been offered at the pump there.

President Bush, with his long ties to the oil industry, hasn't shown much inclination to insist on research and development of alternative fuels. In fact, his idea of an alternative fuel is to open up more oil fields in sensitive environmental areas like Alaska.

But research needs to not only continue, but increase to record levels. If we don't find alternatives to crude oil, this country will one day find itself lined up at the pumps as drivers did in the early 1970s. Or, refineries will continue shutting down and raising prices because America no longer has production facilities to keep up with demand.

Soybeans, corn, oil slate, hydrogen, electricity and other means of supplying energy is the technology we need today.


Friday, July 09, 2004

A Nickel Investment For Future's Grid Will Pay Off

Small Times: News about MEMS, Nanotechnology and Microsystems

Energy is the single most important challenge facing humanity today.

As we peak in oil production and worry about natural gas supplies, life must go on. Somehow, we must find a basis for energy prosperity in the 21st century for ourselves and the rest of humanity.

By the middle of this century we should assume that we will need to double world energy production from its current level, with most of this coming from clean, sustainable, carbon dioxide-free sources. For worldwide peace and prosperity, it must be cheap. We simply cannot do this with current technology.

We will need revolutionary breakthroughs to find the clean, low-cost energy necessary for advanced civilization of the 10 billion souls we expect to be living on this planet before this century is out.

The system most likely to meet that goal is an electrical-based grid that draws from numerous sources – solar, wind, nuclear, geothermal, biomass and fossil fuels – for reliable energy.


Skids are Greased for Oil Crisis

The Cleveland Plain Dealer

When geologists speak of Hubbert's Peak, they're not talking mountaintops or hairdos. They're referring to a time - maybe not so far off - when the world will run out of fertile new oilfields and new ways to recover oil, and petroleum supplies will begin an inevitable and maybe very fast slide.

Today, almost all OPEC nations appear to be pumping flat-out, yet the world still is just an oil workers strike or pipeline saboteur's attack away from big trouble.

That's a clear sign that the old OPEC cushion - excess capacity that allowed Middle East producers to control the market and price - is no more.


Thursday, July 08, 2004

Renewable energy sources offer global chance to shed fossil fuels

The Japan Times Online

As the leading national consumer of fossil fuels, the United States churns out almost a quarter of all the industrial carbon dioxide worldwide. Apologists say this is the price that must be paid in exchange for driving the global economy. Realists see such hubris as eventually undermining human viability on Earth through pollution and climate change.

U.S. inaction on its oil dependency is doubly frustrating because there are now "renewable" energy sources that offer practical alternatives to coal and oil. If the U.S. were to begin the switch to renewables now, there is every reason to expect a global win-win situation within decades, economically and environmentally.

America's passive acceptance of fossil-fuel dependence is also particularly disheartening because it is the only nation with the wealth, technological expertise and international leverage needed to lead a global energy revolution. If the U.S. does not bring its own energy juggernaut under control, then unprecedented international cooperation will be required for the world community to set a new and saner course.

U.S. President George W. Bush has already proved himself wedded to U.S. and Saudi oil interests, meaning his administration will never seriously promote alternative energies.

The probable Democratic Party presidential candidate, Sen. John Kerry, is a disappointment, too, for not championing this issue. His call for a "Manhattan Project" on energy appears limited to supporting more efficient cars and ethanol fuel, which -- being made from corn -- is cleaner than gasoline, but is more likely aimed at appeasing farmers than ending U.S. oil dependence.

It is no wonder this year's election has environmentalists woefully uninspired. Still, there is reason for optimism, as well as a potential field day on the horizon for investors and socially responsible lobbyists.


See also The Worldwatch Institute web pages


Monday, July 05, 2004

Citizens Calling on Governments to Address Peak Oil

Citizens Committee on Oil Peak And Decline (COPAD)

Statement On Global 'Oil Peak'
We, the members of the educational and scientific communities involved in the study of the worldwide peak of oil production, offer the following statement on the problem and its implications for our future:

Oil is a finite resource.

Oil was formed in the geological past, and a growing number of the world's leading petroleum geologists agree that more than 95 percent of all recoverable oil has now been found. We therefore know, within a reasonable degree of certainty, the total amount of oil available to us. As of this statement, we have consumed approximately half of the recoverable oil, and we continue to consume about 75 million barrels per day. Since 1981 we have consumed oil faster than we have found it, and the gap between our growing consumption and shrinking discovery continues to widen. Oil is now being consumed four times faster than it is being discovered, and the situation is becoming critical.

Oil is our most important energy source.

Oil is the fuel that enabled the growth of modern civilization, and all industrialized countries now rely on it to an extraordinary extent. Oil provides 40 percent of all primary energy, and 90 percent of our transportation energy. It is furthermore critical to industrial agriculture, the chemical and pharmaceutical industries, much of the clothing industry, and a vast array of others. The physical and chemical versatility of oil, combined with its high energy density, are such that no other known energy source can serve as a full or even adequate substitute. In short, oil is the lifeblood of the industrial world.

Worldwide oil production is peaking.

After more than fifty years of research and analysis on the subject, it is now clear that the rate at which world oil producers can extract oil has reached, or is extremely close to reaching, the maximum level possible. This is what is meant by 'oil peak.' With great effort and expenditure, the current level of oil production can possibly be maintained for a few more years, but beyond that oil production must begin an irrevocable decline. This decline is a certainty, guaranteed by the natural laws that govern our physical world, and nothing in science, technology, or engineering can prevent it. The consumption of a finite resource is simply a finite endeavor, and attempting to delay the onset of decline only ensures a steeper, more uncontrollable decline.

Oil peak is a powerful force of global destabilization.

The foreshocks of the impending oil production peak are already impacting our economies, our environment, and our geopolitics. The inexorable tightening of supply is destabilizing oil markets, which now exhibit extreme price responses to the smallest of disturbances. Higher oil prices are hurting economies by increasing the cost of consumer goods while simultaneously reducing spendable income. Efforts to shore up weakened economies through relaxed environmental regulations, drilling in increasingly sensitive wildlife areas, or shifting to coal and nuclear technologies, are heightening environmental concerns. And with more than fifty oil-producing countries now in decline, focus on the oil-rich Middle East has sharpened dramatically. Countries of the Middle East have traditionally been able to relieve tight oil markets by increasing production, but, as the Middle East nears its own oil peak, any relief it can provide is limited and temporary. Nonetheless, many countries have become heavily reliant on Middle Eastern oil, and the geopolitical stakes of conflicts in this region have risen to all-time highs.

Solutions must be grounded in science.

The laws of thermodynamics and physics, as opposed to business and economics, must guide us through this crisis. Open markets are not equipped to cope with depletion of a critical resource, as they cannot foresee the serious technical limitations of various replacement technologies. Natural gas, for example, is itself a finite resource, and is already in decline in North America. Hydrogen is a commonly cited panacea, but rather than being a primary energy source, hydrogen is only an energy carrier – much like a battery. As such, hydrogen is strictly an energy loser. Replacing oil with a sevenfold increase in nuclear energy, would pose a serious and expensive waste problem. Renewable energies including solar, wind, geothermal, and biomass must be encouraged, and their potential for large-scale deployment must be assessed. Other technologies still in the laboratory, either proven or as yet unproven, may be extremely difficult to deploy in the timeframe and scale dictated by this problem.

We call on all governments of the world to address this issue very seriously.

Oil peak is an inevitability. The first warnings were made public nearly half a century ago, and increasingly since that time the community of petroleum geologists has expressed concerns about global oil supplies. Since 1995, a group of veteran geologists has been issuing highly specific warnings based on exhaustive analyses. We now ask that the call be heard. A first response must include decisive cuts in consumption, and a thorough reassessment of the size of the world’s oilfields. Communities everywhere must be apprised of this issue so that they may take part in creating a sustainable future.

Oil peak is the most pivotal challenge facing modern civilization. It is time to come together and acknowledge our collective vulnerability, and begin working to change the structure of our culture and civilization in ways we’ve never attempted before. We do not underestimate the magnitude of the task, nor the consequences of a failure to act. Please join us in adopting this statement, and become part of a growing community working to respond at every level.

Saturday, 22nd March 2003


Saturday, July 03, 2004

Saudi's Missing Barrels of Oil Production

From The Wilderness

World oil supply has almost certainly peaked, but the mass acknowledgement of its imminent effects has not happened yet. So, in the eyes of the business sectors and the American public, Peak Oil isn't really here yet. The price of crude has never been higher; but Peak Oil isn't really here yet. Shell Oil has recently been convulsing over a series of dishonest overstatements about its oil holdings, but Peak Oil isn't really here yet. Saudi Arabia is in damage-control P.R. mode, reasserting its indemonstrable claims of abundance with an increasingly hysterical intensity; but any shortfall in Saudi production is due solely to recent terrorist attacks. So rest assured, convenient inconveniences like the Khobar blast will soon be out of the way, and the good old days will be back…

Clearly, deception is much easier when the audience is in denial. To quote the little message in the rear-view: "objects in mirror are closer than they appear."--JAH


Friday, July 02, 2004

Fuel For Thought

STUFF : New Zealand's leading news and information website

As filling up becomes a bigger drain on the back pocket, the cost of other fuels looks more compelling. James Weirlooks at the options.

The fuel cap is being thrown open to "alternative fuels", after world oil prices recently topped $US40 a barrel. The higher fuel prices reflect strong international demand, especially in China, as well as the effect of terrorist bombs in Saudi Arabia and Iraq - which together account for about 36 per cent of the world's oil reserves.

Oil prices have drifted back to about $US36 a barrel, but there are reasons to fear they may rise again and stay up in future. Short term, it is no great leap to imagine Iraq collapsing into a bloody civil war, or even a crisis in Saudi Arabia.

As petrol prices in New Zealand have risen above $1.20 a litre (before easing slightly), drivers have been winding the clock back 20 years and converting to lpg, at more than $3000 a time.

LPG Association executive director Peter Gilbert says "hundreds" more people are now looking to change to lpg, after petrol prices became "painful". The association is not targeting everyone.

"The people who get the most benefit are the ones using the most fuel - taxi drivers and fleet vehicles, and a large number of four wheel drives," Mr Gilbert says. If you drive a big car like a taxi or a van about 60,000 kilometres a year, the payback may come in a year or so he says.
Anything after that is gravy - fuel savings of about $3000 a year if petrol prices stay about $1.20 a litre.

As well as high-mileage sales reps, company car fleets and the like, owners of big and thirsty vehicles are also feeling the pinch from high petrol prices.

For example, a gas guzzling Jeep Cherokee rips through about 15 litres of fuel to travel just 100km and costs more than $80 to fill, so conversion to lpg may be worthwhile.

PROS AND CONS TO LPG
At first glance, the running costs on lpg look much lower than petrol - about 76 cents a litre, compared with about $1.12 for petrol yesterday. But lpg does not have as much energy content as petrol - so add about 25 per cent to equal the score - about 92c a litre.

Automobile Association public affairs director George Fairbairn says he doubts there will be a widespread return to lpg. Most car users will get a pay back only after at least three years of normal running, he says.

"The motorist is not going to go back down that path unless there are good incentives to do so."

And the resale value on lpg cars can be lower because some people do not like to have a "huge tank" in the car boot.

If oil prices rise, there will be much more interest in "hybrid" cars, already available from Toyota (the Prius) and Honda (hybrid Civic), which run partly on batteries and then switch to petrol when going up hills.

But those cars are currently expensive, in the low $40,000 range, as opposed to about $30,000 for a standard model.

"We suggest that is where people will start to lean to, if they want to save some dollars," Mr Fairbairn says. And they are highly fuel efficient, at less than 5 litres for each 100 kilometres - three times more fuel efficient than some big four-wheel-drive cars.

There is also a longer-term concern about world oil supplies and, as a result, prices.

Some think the "peak oil production" level has been reached or will arrive soon, driving oil prices up permanently and dramatically.

Australian scientist John Wright says international studies suggest that global oil production has reached its peak or will peak in the next decade and then production will run downhill.

"I suspect that a price over US$40 a barrel of oil is opening the door to a heap of new technology in transportation," he says.

Energy Efficiency and Conservation Authority senior transport adviser Liz Yeaman says biofuels, made from animal fats or vegetable oils, are "just about there", but they depend on costs of the feed stocks.

There is enough waste animal fat or tallow to provide about 5 per cent of all diesel use and the price of tallow has fallen in the past few weeks.

"So biodiesel would be economic on its own grounds," she says - but only because oil prices are high and tallow is cheap.

Generally, it is more expensive, so banks are unlikely to lend the tens of millions of dollars needed to set up a processing plant.

But biodiesel does have advantages: it lowers the amount of black smoke from diesel engines and it also comes from a renewable source.

Gull Petroleum's Alan Mountford says the company is "actively pursuing" an ethanol blend fuel, made with waste whey from the dairy industry, and it could become widely available around Christmas.

"We are doing some demonstration vehicles with Anchor Ethanol," Mr Mountford says. A fleet of Anchor dairy company cars is expected to use the fuel in Bay of Plenty in the next couple of months.

With higher petrol prices, using ethanol as a blend is now price competitive, but it will not lower the cost of fuel. The other advantage is a higher octane, cleaner-burning fuel with lower carbon monoxide emissions.

The AA's Mr Fairbairn expects hesitation among drivers to use biofuels till they are proven to be good fuels.

But Ms Yeaman says: "Ethanol is just about ready to go right now? with a 5 per cent mix with existing fuel.

"It would mean every car in the country could fill up with them straight away, without having anything done to the car." That makes the process much simpler than converting cars to lpg.

The ethanol blend can be expanded to a 10 per cent mix, but Japanese car companies have balked at that prospect in a "Catch 22" problem, according to Mr Mountford.

"Because it is not tested (in Japan) it is not approved, and because it is not approved, they won't bother testing it.

"We believe we will have a resolution by the end of the year, most likely in favour of 'E5' – petrol with 5 per cent ethanol."

Further down the track, ethanol could be made from the cellulose in grass in New Zealand – even the native toetoe, Ms Yeaman says.

"It is basically cutting out the cow in the grass-to-ethanol process – rather than going through the milk stage – but using New Zealand expertise in enzymes to break down grasses to ethanol." That technology remains under development, she says.

HYDROGEN CARS FOR THE FUTURE
Beyond that, hydrogen fuel cell cars are the great leap forward.

Australian scientist John Wright is the director of the Energy Transformed Flagship Program that aims to develop low-emission energy technologies and systems which lead to the widespread use of hydrogen as an energy carrier across the economy.

He believes there will be a big shift from fuel oil and natural gas to hydrogen.

"There seems to be a leap across, based on the technology using high-purity hydrogen. . . as the fuel of choice."

Hydrogen fuel cells combine hydrogen and oxygen to produce electricity.

Their only emission is water, which steams out of the tail pipe.

As the "holy grail" of fuel, it would cut both greenhouse gases and reliance on foreign oil.

There are many test cars around, but widespread hydrogen fuel cell cars may be years away.

Hydrogen is expensive to produce. In addition, fuel cells are not cheap, and new pump stations need to be built.

"The barriers to introduction are quite enormous – it is a real chicken-and-egg (situation)," Dr Wright says.

Initially, hydrogen will probably be made using natural gas and, possibly, by using coal gasification.

"Making hydrogen from natural gas is not that far off," Dr Wright says.

There is potential, in Australia at least, for making hydrogen with solar or wind power.

Big technological problems come with hydrogen, however. Most storage systems lose about 1 per cent a day, leaking through walls.

"You just can't contain such a small molecule," Ms Yeaman says.

"There are technical issues with hydrogen. It is a bit of a holy grail," she says.