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99 comments on Impressions of ASPO-USA

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Nate Hagens on October 29, 2006 - 10:21pm Permalink | Subthread | Parent | Comments top
Stuarts graphs at ASPO (though falling victim to his preference of using Macintosh over Windows) basically showed that flattening/slight increase in production in KSA and Russia lately has come at time when rig count is soaring, implying they are certainly trying to get more oil, but are not.

My main takeaways were

  1. I am taller than Dave Cohen

  2. Neither side, those of us who believe Peak Oil is real and imminent, nor the cornucopians who think there is plenty of oil for a long time to come, have real hard data to stand on - there are just too many uncertainties. With the stakes so high, we need a)more energy transparency and b) an umbrella energy overseer who can put the building blocks together for the best strategy to use remaining fossil fuels to create renewable infrastructure. There is little funding or effort for either of those pursuits currently

  3. Natural gas is increasingly of more urgent concern in North America than Peak Oil. If we stopped drilling right now, our production would decline by 30% next year, and 30% the year after, etc. LNG will compete against other countries, a 35% energy loss in transportation, and Not-In-My-BackYard opposition. There still exists some demand side destruction left, but then we will be close to the bone.

  4. The recognition of environmental externalities, specifically climate change, soil degradation and water availability was mentioned several times - this is good because we live in a systems world

  5. The conference participants had a large standard deviation - half were Peak Oil conference veterans, and I met many who lived in Boston and were in financial community - these folks viewed this all as information gathering on how to best invest their money, not as a paradigm change on how society needs to be restructured (sample size of 3). Overall a motivated, intelligent, thoughtful group of people in that room that will make change happen sooner than it would without them. Good job Dick, Steve, Scott and Randy.

  6. Despite technical multimedia problems, 2 ethanol (1 sugar cane) presentation were wildly hopeful and impressive. I am writing a paper right now on how chaining (burning the bagasse) overestimates EROI, but it appears that sugar cane cellulosic ethanol in Brazil, especially done organically could be a real answer. Milton Maciel, an organic farmer from there suggested it could even be more scalable if society gives up some other things that we really dont need (like sugar and alcohol). (Id be interested to see peoples discount rates between choosing to drive a car, or be deprived of chocolate)

  7. Net energy is still little focused on, much misunderstood, and very important. Data is not easy however.

  8. It was mentioned several times that we may never see a geologic peak.  Economics/politics may change the shape of future production.  That some people think the peak is past and others think it is 2030 really is a testament to how confusing this issue is.
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Halfin on October 30, 2006 - 12:32am Permalink | Subthread | Parent | Comments top
Those are great comments, Nate. Far more nuanced than we often see here. I fully agree with the importance of recognizing the inherent uncertainty in our situation. The lack of transparency is unfortunately not something that we can expect to "fix" any time soon. Given that reality we have to accept that a wide range of possible future scenarios lies ahead.

It's good to see recognition of the natural gas situation. Even as recently as last year we were still seeing proposals that we would switch to natgas as oil ran out. In fact wasn't it in today's drumbeat that Chino, California is requiring all garages to be built with outlets to fuel CNG cars? How much sense does that make if we're going to run out of NG before oil?

That's also an interesting and provocative point that we may never see a geologic peak. I gather that this means that we may see a peak but the timing and details will be due to the economics and politics of the situation, rather than the classic Peak Oil scenario where we're pumping as hard as we can but we just can't get the oil to come out of the ground any faster.

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WinterIsComing on October 30, 2006 - 6:12am Permalink | Subthread | Parent | Comments top
From a public debate point of view, uncertainty speaks in favor of action: "We are heavily dependent on a resource the exact availability of which no-one seems to know - and people who insist there's no problem have not proven so. It is thus prudent to behave as if the resource was in short supply."

This creates an interesting dilemma with regards to communication efficiency: what is the optimal ratio between

  1. supporting energy supply transparency, and
  2. using supply uncertainty to support conservation & efficiency

By "optimal" I mean "making the greatest contribution to energy security".

There are a couple of factors that help resolve the dilemma. First, option 1 is fundamentally futile. There is no force on this planet that can force oil and gas producers to be transparent if they choose to obfuscate. Second, both options must first make the case that there is, indeed, a lack of transparency. The best strategy thus seems to be to go for option 1 (simpler to communicate) but switch to 2 as soon as the lack of transparency is well understood.

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Dave Cohen on October 30, 2006 - 9:36am Permalink | Subthread | Parent | Comments top
Yeah, there needs to be a post on rigs, both the scarcity for new projects and your remark about the "Red Queen" problem for natural gas. As you say, if rigs were withdrawn tomorrow, decline rates would be steep.

I believe Hughes said the gas lost in LNG gasification was between 15% and 30%. A bit -- but not much according to my research -- is lost in the transport phase.

Re: #8 -- and Kaufmann's related remark that Hubbert's Curve can't differentiate between demand destruction and supply constraint cited by Khaos3

Uhmmm... Hubbert's analysis pertains to oil fields and basins, not just countries or the world. Whether extraction becomes uneconomic on the tail-end of production is a basic issue, as I mentioned. There seems to be a misunderstanding about the phrase "geologic peak". Geology creates a physical contraint on production flows at the wellhead. This constraint imposes higher marginal extraction costs. Therefore, the oil can still be extracted but perhaps not commercially. This depends on marginal extraction costs per unit of output (barrels) which includes the achievable extraction rate (the # of barrels per unit time) as compared to price.

As to Kaufmann, I have thought a bit about that. Lately, we have seen a production ceiling and demand bumped up against it. Because there was no spare productive capacity (or some for heavier oils), prices rose and demand has fallen. Especially for the poorer countries, who have been priced out of the market -- there's a story here, I just need to pick a country. Anyway, a productive capacity contraint has existed lately apart from one's view of the Hubbert function (however defined) -- and despite whatever CERA may say. A superficial look at the data curve supports Kaufmann's observation but hides the ceiling constraint. In the end, it makes little difference.

Nate, I'm short, but you're taller than everyone  

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AlanfromBigEasy on October 31, 2006 - 11:01am Permalink | Subthread | Parent | Comments top
Unlike Mr. Maciel (a very nice gentleman), I and many other TODers at the conference, support the biological consumption of ethanol !

Best Hopes,

Alan

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