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86 comments on Oilwatch Monthly - June 2008
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86 comments on Oilwatch Monthly - June 2008
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Good stuff, thanks. Anyone got any idea as to how much of the liquids is really double counting of stuff, like ethanol production which uses up a lot of oil, natural gas, and coal, and I calculate that it uses up more that most figure:
A review of studies by the National Resources Defense Council and Argonne National Laboratory regarding the net energy gain from the production of corn ethanol, reveals that some studies indicating some gain and one study indicates a net loss of energy. None of these studies, however, considers all of the energy inputs in all of the processes required to produce ethanol (mining and transport of ores, parts, equipment, heating of factories, all employees’ transportation and salaries (oil consumed in spending salaries), and maintenance, etc.). More at pages 21 and 31 of peak oil associates report --- I can't link my report as the editors will delete my post. Is it that they don't like me, or is it what I have to say :( ?
So, if you took corn ethanol out, what would liquids look like???
It's not just biofuels that require large energy inputs. In fact one of the central tenants of Peak Oil is that the second half of the worlds oil will require exponentially increasing energy inputs to extract, and still yield declining flow rates. And I don't just mean natural gas, coal, blah. It'll require more raw materials (steel, etc.) in the form of extraction/transport infrastructure like deep sea rigs or roads/pipelines for ever more distant wells.
So it's not just the Biofuel part of the liquids production estimates that are meaningless. It's everything in general, the conventional crude production statistics too. None of these even try to estimate on even a global basis what the the energy overhead for energy production is (the energy the energy sector gobbles up), and thus what the net liquids is (production available for other sectors of the global economy). I hear ERoEI figures of 5:1 for Tar Sands and 10:1 for Conventional crude thrown around but I don't know how accurate these may be. I suppose they give you some idea. But it'd be nice if ERoEI was taken seriously by the EIA and IEA. Although I realise how even the estimates for each nations' consumption are difficult to come to, let alone the consumption figures for each nation's energy sector, let alone complicated things like taking emergy into account in the ERoEI (such as the steel used in a rig for example).
So I think the question "if you took corn ethanol out, what would liquids look like???" is the wrong one. The question should be: "If you deducted the energy+emergy overhead for energy production from gross liquids, what net would you be left with?"
I'd say if you did that we'd have been on a decline in "net liquids' energy" since perhaps 2004. Although I'm no expert. Perhaps someone else could hazard a guess what net liquids' energy graphed from 1850 to 2008 would look like.
Thanks Rembrandt,
The most telling figure is that the non-opec ( presumably more market driven) production has not changed from 2004, with 300% increase in price!
The good news is that overall demand has also flattened with ONLY a 300% increase in price, even with China's economy growing at 10-11%.If you look at copper, nickel, iron ore, coking coal price increases have been much higher. I think this means that oil use is more elastic than some of those other commodities, and that substitutions (thermal coal, LNG, even wind) are occurring.
I think the reason for the price increases of other resources is that oil is used in the extraction and transportation of those resources. The energy needed to produce those resources has gone up and therefore the price of the resource has gone up even more.
While worldwide biofuels production may have reached something close to 1.5 miilion barrels per day, it might not be sustainable not only in terms of energy inputs, but also in terms of fertilizer. The phosphate and potassium deposits are finite and non-renewable. Todays high crop yields are not possible without these nutrients.
Sorry, thought I should check that 1.5 million barrel a day biofuels figure. Have picked up too many bad rumors on the internet. Once I read that ethanol had lowered the price of gasoline 15 cents. Later I thought, "...the price of gasoline went up a dollar."
Worldwide ethanol production in 2007 was reported to be about 13 billion gallons.
That is 848,000 barrels of ethanol per day.
World biodisel production is elusive but is probably about a billion gallons per year with growth limited by lower oilseed stocks.
Less than a million barrels per day (approx.) liquids production may be attributed to biofuels.
A net energy curve is what we need for near peak and post peak history. This is what is supplying the world's energy and setting prices, and it morphs dramatically as you go through the peak time frame. Each EIA report I see forces me to try to see in my mind's eye what these curves really mean in supplying our energy.
Yes, many here have called for data on net production in order to realistically assess the true magnitude of the oil/liquids problem. While we are at it, EIA and IEA should show net exports as well in order to even more accurately portray the problem that the consumer countries face. Anyway, the price at the pump should give people a clue without all this data that the public could care less about anyway.
Net exports captures some of the energy used in production, in that energy consumed to produce the oil never makes it to the export market. However, it doesn't capture non-oil energy inputs (e.g. natural gas used synthesize oil from tar sands), and it doesn't capture oil that is indirectly imported and used to produce oil, as when Brazil leases a deep-water drilling rig (i.e. the country that built the rig most likely used imported oil to build it).
Net energy decline is a huge issue, and it is going to be very difficult to quantify. IMO, the somewhat bloated numbers coming from the IEA actually represent a net energy decline, even as production records were being set. Analysis based solely on gross production is faulty analysis. To paraphrase what Euan wrote yesterday, any analysis that doesn't talk about net energy can be dismissed out of hand.
"Net energy decline is a huge issue, and it is going to be very difficult to quantify."
Just for kicks & giggles wouldn't' t it be possible to plug in the rate of net energy decline from 100 - 1 to 10 - 1 (picking some arbitrary date of when the bulk of this decline began, say 1990?) into the standard production graph which would obviously turn the line south?
Sorry I am not much of a wiggly line guy or I would try it myself.
@Cjwirth
Thanks for raising the issue of biofuels. I intend to add a chart next month which seperates biofuel production from other liquids production. This is easier than it seems because the data for biofuels is not separately available from one source.
Would it really make any difference to the trend if it remained consistent? The absolute volume of liquids is really pretty meaningless at an individual or even country level, it is the trend that matters. At the point that ERoEI for biofuels hits 1:1 would this not cause the trend to flatten somewhat anyway?
I think that the removal of biofuels will change the curves significantly. If you look at the crude oil production levels you see that the trend is down for almost all. Yet world liquids production keeps rising.
Also world oil production is rising slightly or remaining level. Why is that so ? If the trend for most oil producing countries is down? Where is the oil coming from?
That's my question too. Just examining the charts by eye, you see about a 2 mpd increase in total liquids in 2007, and about a 1 mpd increase in crude oil production. Yet, the only producer in that period that raised it's crude oil production was the KSA which raised it about 0.6 or 0.7 mpd. We've still got 1.4 or 1.3 mpd of liquids to account for. My understanding is that a lot of the extra liquids is some froth that comes up with the gas caps on older reservoirs and condensate from those as well as natural gas wells. Well it must be, otherwise it would show up in the crude oil production curves, but we're still missing some of that too since the crude oil production is higher than just KSA's contribution.
Just a guess: Angola might be taking up some of the slack and providing some substantial portion of those "missing" barrels. Iraq as well seems to be calming down and outputting more oil these days.
Biofuels will account for 63 percent of oil supply growth from non OPEC countries this year, taking global production of crop-based fuel to more than 1.5 million barrels a day, the IEA said today.
http://www.worldwideag.net/index2.php?option=com_content&do_pdf=1&id=1267
Yes, you've certainly identified a significant flaw in the "total liquids" methodology. It is probably still an important metric to track. The thing that really angers me, though, is when people trumpet new record highs in total liquids as proof that PO is a non issue, etc., with no regard whatsoever for the net energy issue. It is intellictual dishonesty, to say the least, and highly obfuscatory and misleading.
I agree, it's irritating, but it's also a framing issue that peak oilers have brought on themselves by obsessing over the timing of the peak. In my opinion, we need to drop the phrase and concept of "peak oil" and start talking about eroei and flow rates (as many contributors to TOD have convinced me with their excellent analyses). You know, although this Rembrandt chap does an amazing job tracking oil output, maybe somebody else can conduct a monthly "sub-analysis". To really "sell" the problem, in this "sub-analysis" I would restrict my liquids output graphs to just one for the entire world, then I would plot the following graphs: 1. Amount of oil/liquids on the export market as a function of time (oil price in the background), 2. a graph of oil/liquids importers (# of countries and approximate volumes and a function of time), and 3. overall liquids combined eroei as a function of time (with oil price in the background). Graphs 1. and 2. capture the "real" issue: more and more countries bidding for a diminishing "pot" of market oil. Graph 3 captures the effects of Canadian tar sands and biofuels in the mix. Yes, liquids are going up, but eroei must surely be going to hell.
In my view the Export Land Model is the only relevant point of reference. As was suggested, falling energy return will be reflected somewhat in declining exports. But really, what matters most is the volume of oil and refined petroleum products available on the global market.
When people are really committed to their point of view (i.e. their foot is nailed to the floor), they will find any evidence to substantiate their point.
People not wanting to accept peak oil is not just an evidence thing, it's a psychology thing, too.
I suspect that no amount of slicing and dicing and framing would make a difference for some people.
For example, look at the overwhelming evidence for global warming and there are still people who grasp at the flimsiest, narrowist counter-evidence often because of their ego or they are confronted by something or they have come to identify themselves as their point of view and thus have no detachment from the topic.
It's the same human phenomenon seen when someone says, "I'm a miner, that's all I know how to do." ("Miner" is just an example; I don't mean to single them out.) The person who says that has no distance between the set of behaviors and thinking that constitute "a miner." "Knowing who you are," though completely fictitious beyond being a human, is very comfortable.
Stepping outside of that requires being uncomfortable, and many (most?) humans don't like that very much. Just look at how we react when we hear an opinion different than our own. We sometimes go ballistic. We aren't able to relate to different points of view as simply different points of view without identifying with them and then feeling threatened by others that are different from the ones we've adopted.
This is one of our greatest weaknesses — and one of our greatest strengths.
-André
www.postpeakliving.com
I see your point, I partially agree and I also disagree. I can give you a couple of examples of successful framing, and see what you think: Actually, I'll take one example. "Waterboarding," a totally new word introduced by Dershowitz (sp?) in 2004 to describe the act of torture involving controlled drowning of the victim. Those in power call it "simulated drowning," but in fact it is "simulated death." (I'm semi-quoting from a commondreams article written by a framing expert whose name I forget and am too lazy to go and look up.) How comfortable do you feel about waterboarding? Probably most people haven't given it too much thought and are reasonably comfortable with it as a "harsh interrogation technique". But these people would change their minds instantly if they experienced it themselves or saw a video of somebody being waterboarded (water tortured). With the right framing you can get people to believe and accept almost anything. Watch Derren Brown on you tube if you don't believe me.
I can't speak on the IEA numbers, but it seems that beginning in 2007, the EIA was not going to double count EtOH production from the standpoint of oil used in the production cycle.
In other words if it took 100,000 BOE to produce 150,000 BOE of EtOH, the EIA would not report it as 250,000 BOE production but rather only 50,000 BOE production. I remember seeing that in one of the EIA news releases or perhaps it was the Change Notes at the front of the IPM.
Oh ok. So I suppose they are sort of giving the net for conventional crude and condensates? That's good I suppose.