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If we consider the real energy supply, the impact of slowing oil supply growth in the latter part of 2005 will be seen only this year (because of the processing and logistics time lag). And yes, the are clear signs in the economy now.
Zero oil growth will not mean that the World energy supply growth will be zero, but it will mean a further slow down - about a half per cent. But this means also that if the oil production starts decreasing about 5% or more, the World Energy Peak is in.
World coal production growth is unlikely to increase from the present 5% level - the Chinese coal growth is already at the level of 10% and it is not going to get much better. The rest of the World cannot really increase its share enough. Coal is badly depleted in Europe and elsewhere, the volumes of Australia, Indonesia and South Africa are not large enough to make a difference. And the record of the US coal production growth is not such as to warrant a forecast of significantly higher growth than now.
Natural gas is crucial, but the supply growth has slowed down recently, so it is not likely to compensate the depleting oil as much as would be needed. And note, Bakhtiari is predicting Peak Gas in the near future. In any case, the present gas production data suggests that the growth is not going to be much higher than now.
What we will see in the near future is an economic slow down, where the action is mainly in the financial sphere (forex, debt, stocks, real estate). But we might get the World Energy Peak surprisingly soon, may be in a time frame of 5 - 10 years, and steep decline after that. It is not realistic to think that the Chinese coal production can keep the 10% pace for long. Add to that Peak Gas and Oil and All Liquids.
Note, that the the World Energy Peak may arrive quite soon even if the Peak Oil is delayed (the CERA/optimist view) or there will be just a longer oil plateau first, without decline or growth. In this situation natural gas will decide. In any case there is not much energy growth potential left in the World, so even a rather optimistic scenario will give a World Energy Plateau in a few years. The energy volumes involved are so huge that alternatives will not make any difference, CTL and GTL will not count here at all, because they depend on available coal and gas.
There you have the big picture.
Based on Simmons & Company data, total fossil fuel + nuclear energy consumption worldwide is about one billion barrels of oil equivalent every five days. Worldwide, we burn through the energy equivalent of all Texas oil production to date about every 10 months.
The other article was about data processing centers, which the article stated can use as much electricity as a city of 30,000 to 40,000 people. There was an article in the NYT about the new Google computer facility going up in the Pacific Northwest. They located it there to be close to large amounts of cheap (hydro) electricity.
In today's WSJ, there is an article contrasting the fate of the energy exporters to the energy importers, "In Oil's New Era, Power Shifts to Countries With Reserves." There was an interesting quote by the Saudi Oil Minister, "Any industry that requires intensive energy will be welcome in Saudi Arabia.
At I have noted before, it seems to me that we are going to see a population shift, here in the US, and worldwide, to areas that have surplus energy to export. As I have also pointed out, as depletion and rising domestic consumption both work against net export capacity, net exports are going to disappear at a rapid rate, while demand in energy importing areas like China continues to go up at a rapid rate.
Final quote from the article, by Henry Groppe, "We have entered the era of scarcity and price rationing (for oil)."
This is of course a mischaracterization of the Peak Oil argument--that one day we have oil, and the next day we don't. In any case, the WSJ writer went on to state that "But some oil experts foresee the big Western companies running out of easy-to-tap oil, and most of them are already turning to harder to recover reserves."
The overall theme of the article regarding Western oil companies is that they are turning toward GTL projects and to tar sands and very heavy oil and away from traditional exploration--not because they want to but because they don't have a choice.
There were three broad themes in the article: (1) life is good for energy exporters, not so good for energy importers; (2) Western oil companies are turning more toward mining type operations for oil, rather than traditional drilling and (3) they finished with a pretty good summary by Henry Groppe, that we have entered a new era "scarcity and price rationing."
The only mild gripe I have with the article is the mischaracterization of the Peak Oil argument, but the rest of the article all but made the Peak Oil argument, but in different words. The only real question is how fast unconventional oil production can be brought on line. IMO, it won't be fast enough to offset the declines in conventional production.
People don't pay enough attention (IMO) to the increasing role of electricity in the US economy. As implied in the following graphic comparing economic growth in the US to electricity growth and total energy growth, electricity is playing an increasing role in our total energy budget.
According to BP, the US electricity generation in 2005 was 4229 TWh, and the Chinese 2475 TWh. But the Chinese generation grew 12.3% and the US only 1.7%. The growth of the Chinese electricity generation accounted for 42% of the increase of the World electrcity generation in 2005. It is important to note that in China most of the energy and electricity is used in manufacturing (up to 70%), unlike in the US where residential and commercial use dominate (the share of the industrial sector of the electricity consumption is about 30%). This means that the Chinese industry can use considerably more electricity (and energy) than the US manufacturing sector. Here we have a striking example of the importance of energy in economic development.
We should especially note the rate of growth here. China is definitely where the growth is in energy production. The average electricity generation growth between 2002 and 2005 has been nearly 15%. This means doubling the production in 5 years! If the 2005 growth could continue, the Chinese would produce more electricity than the US in 2010 and its industry use it 3 times more than the US industry - and nearly as much as the US and EU industrial sectors together. I think it is easy to understand the significance of this.
An another matter is, if these extrapolations are realistic. It is obvious that China will meet the physical limits to growth very soon. What will happen when the growth engine of the World energy and economy stops?
The Chinese energy (coal) production is, of course, crucial to the Climate Change. China is overwhelmingly the most important factor here. So the future of Chinese energy production is decisive to the climate forecasts. The forecasts of the increase of CO2 in the atmosphere are dependent on the fossile energy (mostly coal) supply forecasts. But most of those forecasts used here are based on EIA or IEA super-optimistic "official" long-time energy scenarios. Closer look suggests that the overall fossile energy production is nearing to a peak very fast, or at least to a situation where the growth slows considerably. I think these are basic facts for a global Climate Strategy.
Incidentally, as I promised someone I would look up, Chinese coal consumption was 70% of primary energy in 2005, up from 67% in 2002.
Here we see the secret of the Chinese economy. The energy production of China has risen 44% from 2002 to 2005, and this at absolute volumes comparable to the US! The Chinese total energy production growth has supplied almost half of the total World energy supply growth during that time (450 Mtoe of 1010 Mtoe growth). China has been literally the engine of the World energy and economy.
It is absolutely clear that low costs are not the main reason for production moving to China. The industrial growth there would have been impossible without this huge growth in domestic energy production. This is the biggest "energy surge" in the World history and the driving force of globalization.
And as Smekhovo noted, the rising share of domestic coal in the Chinese energy mix is the explanation for those missing symptoms of an oil crisis (no real supply problems, prices not really skyrocketing, economy not yet slowing) in face of slowing supply. The rising share of coal is an anomalous phenomenon - developing, modern economy would normally use relatively more of oil and gas, not less.
It would seem that if China will not be able to grow their energy sources, then their economic growth must slow too. But at the same time, the competition for outside sources will then become very great. The key event would then be peak Chinese coal, not peak world oil.
But the Chinese are totally locked into the path they are on. Without burning the coal, their economy melts down and there's another 1949. Unlike here, remembrance of revolution is fairly recent. So the last thing the government will (can) do is allow any great cooling. Nay, worse, they can't even afford to allow things to level off.
And yet, we may be on the verge of just such a cooling off of the world economy if the current slide in the markets doesn't reverse itself.
It's all way too interesting. I'd love to be bored for a few years.
One example is importing from China. Seems like it would exposed to oil price increases. Yet container shipping is very effecient. Large cargo ships loaded with a generic size container with RF Id tags utilizing automation - that can move alot products at low cost. So that's why you can afford to ship all those Dollar Store items.
There is a POSSIBILITY that you have underestimated the potential for wind.
Wind is the only renewable that has the potential for a significant worldwide impact.
IMHO, 30% annual, compounded growth is possible, with occasional spurts greater than that. Designs will improve somewhat (not a mature, but a maturing industry) with 3% to 5% annual improvements in cost effectiveness (measured in a stable economy). In a recession, booming sectors attract capital, labor and materials.
In a decade (optimistic case) this new wind power plus much smaller contributions from other renewables & new nukes could balance the declines in other energy sources.
Of course, legal and social obstacles must not be an impediment (see the Kennedys, English "conservationists", ec.) to allow this MASSIVE growth, ann they likely will be.
Is there any guarantee, if wind is successful (or any renewable for that matter) we will not overdo it as we did the automobile, and simply turn the planet into an infinite powerplant ? What if someone invents better electrical storage so turbines can handle baseload? How can it fail to be overdone, if it actually works? When have people ever stopped drawing on a resource that still yielded more? I'm all for people being responsible for their energy consumption by having their energy plants in their own backyards, but knowing the greediness of my neighbors and their basic disdain for the common landscape as compared to the conveniences inside their monster houses, I am really not sure I would want a breakaway success of wind, or anything.
This is what it takes today to build a Nordex N-90, a windmill capable of producing 2,3MW:
150 tons of steel
10 tons of coper
30 tons of glass fiber
1.000 tons of concrete
If we were to substitute all the world electricity consumption (not all energy!) with windmills we'll need 6.000.000 of those Nordex N-90, ALL OF THEM in type 6 fields, and we'll need:
90% of the world production of steel
113 times world production of glass fiber
3,4 time world production of concrete
Just to let you know how really renewable is a windmill. Having said that, I hope to see as many windmills as we can fit in our territory.