135 comments on Peak Oil Update - October 2006: Production Forecasts and EIA Oil Production Numbers
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135 comments on Peak Oil Update - October 2006: Production Forecasts and EIA Oil Production Numbers
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The other conclusion I can draw is that we will peak no later than the 2010 timeframe, assuming we aren't all ready at the plateau. If both Ghawar and Cantarell are collapsing as reported, all bets are off.
"good night nurse," as Archie would have said.
It appears to me that OPEC is becoming increasingly confident that there is no competition out there that could realistically reduce call on their oil to any meaningful degree.
Their population has doubled or more, and they need the money.
They were terrified of Carter's coal-to-liquids project, but CTL is now slowed down by global warming concerns. Corn ethanol can't scale to large volumes, cellulosic ethanol has an uncertain development path, and electrification of transportation will take a little while.
They'll develop eventually, but it will take a little while, and by that time the royal families will be in Europe living on their bank accounts.
They are building refineries because the new oil is so poor in quality that most worldwide refineries can't process it. They don't want to produce oil they can't sell due to worldwide refinery limitations. As you know, we are not building new ones in the US, although they are certainly being modified & expanded. There are significant pollution problems with the sour, contaminated oil which would probably make licensing & environmental regs very hard to overcome here for example.
Alternatives to oil have large R&D and manufacturing plant investment costs, and long lead times. These barriers to entry have protected oil.
Typically, they also have low operating costs. Once built, such plants will stay in operation even if oil returns to a low price. We have seen this with CTL.
More importantly, there are large unknowns in R&D. If a great deal of $ is invested in R&D, and effective & cheap alternatives are found and made to work (such as Eestor ultracapacitors), oil could be displaced surprisingly quickly. Even if we only get the incremental progress that is pretty reliable, next-gen li-ion batteries will likely be competitive with oil in the next 5 years. Once that tipping point is reached electric transportation might actually become better than oil in every way, and oil could be displaced relatively quickly.
We could have astronomical oil prices for 10-15 years, only to have them crash as the growth curve for alternatives catches up with demand and the remaining oil becomes largely obsolete for transportation.
I think the Saudi's know this (though much of OPEC does not), but know they have mostly lost the power to cap prices. OTOH, they still have some power to choose how much prices drop from their recent peak, as supply has caught up with demand for the moment. Even if depletion will kick in fairly soon and raise prices again, it would be in their best interest to let prices crash for a year or so (or as close to that as they can manage) before then to kill off alternatives for as long as possible. I think they aren't doing so because they want to maximise revenue for the short-term, to make their citizens (and other OPEC members) happy.
Or maybe they're not that smart. Yamani (SA's oil minister in the 80's) knew this stuff...
Not so. Oil can be replaced relatively easily with electricity.
Let's review the background. First, electric vehicles are about 8 times more efficient than your average gasoline vehicle (1,600 watt-hours/mile vs 200 whrs/mile). Second, there is no real threat of electrical shortages: the articles you're thinking deal with peak supply/demand and lack of investment in infrastructure, rather than shortages of energy supplies. There's plenty of excess capacity during off-peak times: the average utilization of the US grid is less than 50% (440GW average vs 905 peak capacity). Oil & Gas supply only 21% of US electricity, and can be relatively easily replaced with wind (preferably) and coal.
The average demand in the US is about 440 gigawatts (GW), and to replace all 210M light vehicles (cars, SUV's, pickups, etc) with electric vehicles would require only about 57GW, or an increase of 13%, which could easily be done at night with excess capacity, and largely from wind power.
Electricity is the easy part, and is much cheaper than oil ($.02/mile, versus $.10 per mile for gasoline). Replacing oil as a portable source of transportation energy is the hard part.
I like the Tesla too.
I think of hybrids as the vanguard of the movement to electric vehicles. The drivetrain of hybrids like the Prius or Escape are roughly 40% electric, despite the fact that the original source of their electricity is gasoline. With 1.8% of the market, that means that the market is already about .7% electric.
As hybrids grow, and plug-ins are introduced, the light-vehicle market will gradually transform, and as batteries improve the EV range can expand.
The nice thing about these hybrids is that in an emergency they could be upgraded to plugins quite easily, thus greatly reducing the 20 year adaptation window assumed by people like Hirsch. I wish the US would break past it's current paralysis (in part due to the current Pres. administration) and greatly accelerate progress, but fortunately we are moving forward with some kind of noticeable speed.
Are you in PG&E's service territory? I understand they're installing time of day meters in the next year or so - are they going to do that for you? I would think that would help with making PV pay, as you would be able to sell power to PG&E at a high rate during the day, and charge an EV at night at much lower rates.
"However, the spare capacity, as I understand it, includes hydro, natl gas and other generation that really can't sustain an all out 24/7 production."
As I noted previously, I don't believe there's a real danger of the lights going out Mad-Max-wise, as there's always coal (and nuclear in the longer-run) as a last resort. California is an interesting case, as it has made a policy decision not to use coal, and therefore uses gas for about 50% of it's power generation. It does have a little nuclear, which gets more important at night. In the following discussion we have to keep in mind that during all the acrobatics CA will go through to deal with electrical generation that coal will still be there as a last-resort - I don't think anyone can realistically believe that CA would not use coal & nuclear if they were the only choices to prevent serious, long-lasting blackouts.
As far as off-peak energy production goes, you're right, nat gas turbines aren't really meant for base-load production. Wind is the clear answer. Texas just passed CA for windmill installation, but I expect CA has a fair amount in the planning process, including a lot of replacements of older, small inefficient turbines. Altamonte is an important site, which unfortunately has real bird problems (realistically the only site in the country to have such problems). I suspect some wind power from mid-west states, and West Texas might go all the way to CA.
One possibility for CA are offshore floating windturbine structures , which are based on proven oilrig technology but still in development. They'd reduce costs, raise reliability, take care of visibility problems, and I suspect could be sited to solve the heatwave peak output decline problem. Another is kite-based windturbines, which I believe will be faster to install, can take advantage of stronger & more reliable high winds, and have reduced structural costs - they're still in R&D, though, and more speculative.
Peak power is a little more difficult. On-shore wind in CA may only provide about 15% of it's normal output during serious heatwaves. In the longrun solar is the obvious complement, as it's at it's best during such heatwaves. I understand that CA is hoping to get about 5-6% of it's peak power from PV over the next 10 years (3GW vs 50GW peak capacity). Here it's important to remember that PV prices are artificially high right now due to soaring demand and subsidy programs; that underlying PV costs are falling quickly; supply is ramping up; and building integrated PV will slash Balance of System costs, so eventually PV consumer pricing will fall sharply. . Also, there's pretty good indication that the A/C peak demand is pretty artificial, and could be seriously reduced by time-of-day metering and other demand management programs. Electric vehicles will help a great deal here, with planned charging and even Vehicle-to-grid peak supply.
CA is likely to have some difficult times coping with nat gas depletion, especially without using coal. The energy is there, but they'll have to move fast to take advantage of it. In the meantime I suspect electicity imports to CA, and rates, will go up.
Thanks very much for your post. It's nice to see people actually think these issues through with real numbers.
I've come to the same conclusions based on these calculations. It's great to get these independent confirmations.
But it's very nice to hear that it makes a difference to people.