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The US Offshore Drilling Argument: The Debate Between "Starting Now" and "Waiting a While"
Posted by Gail the Actuary on June 30, 2008 - 10:00am
Topic: Supply/Production
Tags: american petroleum institute, anwr, california, florida, offshore drilling, original, peak oil [list all tags]
| Offshore drilling is again in the news, with many saying we shouldn't drill now. Drilling will take more than 10 years for most of the oil in question. I believe that we need to start the process now, partly because the expected impact of peak oil will make drilling in future years much more difficult, and partly because technical advances within the petroleum industry have helped overcome some previous objections to drilling. |
Locations of concern include coastal waters such as those near Florida; the Outer Continental Shelf (OCS) (beyond state coastal areas); and the Arctic National Wildlife Refuge (ANWR).
The views in this article are my own, particularly the peak oil views. Many of the comments about technical issues are based on discussions with the American Petroleum Institute (API). I recently participated in an API bloggers conference phone call on the subject of "Exploration and Production." We talked about offshore drilling and ANWR. A listing of the people involved can be found here, and a transcript of the call can be found here.
Why We Should Start Now
If legislation is passed to permit drilling in areas which have previously been off limits, it will be at least 7 to 10 years before we can expect new production (Transcript 15:43). If new production is far from existing pipelines, as is often the case, new production is likely to be at least 10 years away. This long time period is required because of the many steps involved.
In this post, I will first tell you the reasons why I think we should start this long process now. After that, I will answer some of the objections I am aware of.
Necessary resources available
I think one major reason we should start now is that we have the drilling rigs, trained geologists, pipelines, financing capability and all the other requirements for going ahead with drilling now. (Transcript 26:30) These may not be in as good supply as companies might like, but if companies are willing to wait until an appropriate rig becomes available, and until staff can be brought on board, there is a reasonable chance of projects going forward.
In future years, as we pass peak oil, the world will become a more a more difficult place to do major integrated projects of any type. There are likely to be financial disruptions that make financing more difficult. More and more pipelines will exceed their planned lifetimes. Air travel will become more and more difficult.
A reasonable estimate of the timeframe for oil production in these new locations might be 2018 to 2040 if we start the process now. If we delay for say, another 20 years, the production window might be 2038 to 2060. Who is to say what the world will look like then? If we don't start now, there is a good chance we may never be able to access oil in difficult locations. A bird in the hand is worth two in the bush.
How much do we really have?
According to API (Transcript 23:17), we really don't know how much recoverable oil is available. There are some published estimates for various pieces--coastal oil, OCS-48 states oil, Alaska-offshore, Alaska-ANWR--but none of these is very big. At this point, we haven't done any on-site research to see what is really there, using today's equipment. We don't know if there are some fairly good sized fields that we have overlooked. It is possible that the estimates are too high, but without looking, we really don't know.
Better use of existing pipeline systems
We have pipeline systems both for transporting oil to refineries and for transporting refined oil to consumers. The pipelines exist within the 48 states and Alaska. As production from existing wells diminishes, the amount of oil flowing through these pipelines will drop below their planned operating levels. Additional production from new sources will keep the pipelines operating longer, and give at least of chance of business close to normal, if not business as usual. The issue of minimum operating levels is raised in a recent EIA analysis of ANWR.
One thing we should consider is that our existing distribution system is built with the expectation that we will have our current 20 million barrels a day of supply. What will happen if our imports get cut back dramatically, perhaps because of financial issues? The more we have of our own resources to prop up the system, the better.
Better energy return on investment (EROI)
All of the proposed new drilling areas seem to have relatively small potential. Oil companies will start running into problems with overly high fixed costs if the majority of oil that is available is from these small locations. If companies need to start laying large amounts of pipeline because the old pipeline has corroded, costs will be even higher. If companies can arrange their drilling so that they can piggyback on infrastructure that is still available, this will increase the likelihood that it will be financially feasible to drill in these areas.
Help cushion the downslope
The estimated amounts from drilling these areas don't appear to be very great, based on information available at these time. No one who has studied the question thinks that the additional production will actually postpone the peak. In fact, all of these areas together are not likely to provide very much production. Whether or not they provide very much, they may help make the situation less bleak for people who are around during the window when their oil is available.
Protect (very partially) against the loss of imports
At this point, it seems to me that we are living on borrowed time with respect to the amount of imported oil we are buying, given our lack of exports to pay for the oil. If we start pumping our own oil, it might partially offset the loss, when it comes.
Objections
These are my responses to some of the reasons I have seen for not drilling.
Spoil the view
In areas where there is a tourist trade, or even fancy homes along the beach, there is often concern that drilling equipment will spoil the view, and thus negatively affect the local economy. This is primarily an issue where drilling would be close to the beach.
The current Republican legislation relates to OCS areas that are at least 50 miles from shore. At this distance, there is little chance that oil platforms would be visible from shore.
According to API (see transcript, 11:45), even with coastal drilling, technology has changed so that it is not necessary to put oil derricks or platforms in the middle of the view. Newer technology allows companies to place the physical structures out further, beyond the horizon. The physical structures are then tied by umbilical lines to small subsea systems closer to the coast which are out of sight.
Oil spills
According to API (see transcript, 32:50), most oil spills happen when an oil tanker (a special type of ship) collides with some object. Very often these tankers are international ships that are not required to comply with US laws regarding oil transport.
When oil companies produce oil offshore or on US soil, they transport the oil in pipelines, rather than in tankers. There are many fewer spills with pipelines than with tankers. For US produced off-shore oil, there have been no major spills in 25 years, even in hurricanes.
If there are fewer spills when we produce oil ourselves and transport it by pipeline, and more spills when we import oil by tanker, the oil spill argument against offshore production makes little sense.
Save it for our grandchildren
The idea of saving oil for our grandchildren is popular among people who are peak oil aware. The problem is that we are saving fields that are difficult to extract, in remote locations. If they are difficult for us to extract now, they are likely to be even more difficult for future generations to extract, when fewer resources are available.
The oil infrastructure we currently have is likely to corrode over time. We may also have problems with available oil falling below pipeline minimum operating levels, even before we run out of oil. With these difficulties, and the general lack of availability of resources after peak oil, I question whether future generations will actually be capable of producing and distributing the oil that is left. If we want to save oil for future generations, it seems to me that we should extract it now, and save it in easy to access storage facilities.
Nothing in it for the local economy
This argument may not be explicitly stated, but I expect that it is one of the reasons there is not much support for offshore drilling. Oil companies operating offshore often use contractors from distant locations (the largest offshore drilling contractor is Transocean, headquartered in the Cayman Islands) and contract workers from around the world. In addition, workers who work on oil platforms sometimes commute (by air) to homes many states away. If this model is followed, the benefit to the local economy may not be very great.
One benefit states can expect to get (see transcript, 30:18) is a portion of payments made by oil companies under leases. Under proposed Republican legislation, amounts from offshore leases are shared with the states, with states getting 37.5% of the funds. This means that states get up-front money, while oil companies are in the process of looking for the oil.
As oil gets more expensive, long distance commuting by off-shore workers will become less and less feasible. In many ways this will be good for local economies, because workers will be more likely to spend their money near where the drilling takes place. In inhospitable areas like ANWR, it may mean that it will be harder to find workers because it will no longer be feasible for workers to live in Hawaii and work in Alaska, commuting back and forth every two weeks.
False promises
The Republican legislation that has been introduced has the misleading name of "The Gas Price Reduction Act of 2008". It includes a provision to allow drilling on the OCS more than 50 miles out, and the option for states to choose to drill closer. The rest of the package is of rather questionable value. It would repeal the moratorium on oil shale development; give funding and loans with respect to plug in autos; and make some changes in futures markets. I can live with these, but they certainly won't provide as much benefit as the title of the legislation suggests.
If one looks at the description of benefits, one can find more misleading information. Drilling in the OCS is said to provide 14 billion barrels of oil, and this is said to be "More Than All US Imports From Persian Gulf Countries Over The Last 15 Years." Most people don't know that in the past, most US imports have been from places like Mexico, Canada, and Venezuela, since they are closer than the Middle East. It would have been clearer to say, "Almost three years of US oil imports, at current levels" or "Equal to six months of world oil usage."
I would agree that the legislation is packaged with promises that don't make sense. Nevertheless, I think the question of drilling should be judged on its own merits, regardless of the silliness of the packaging.
We need to increase auto mileage standards first
I don't know that waiting until we have auto higher mileage standards necessarily makes sense. Offshore drilling and higher milage standards are really two separate questions.
In some sense, it is questionable whether we even need to build more gasoline or diesel powered cars. We already have about as many cars as we need; we could just fix up ones we have. Instead of building more gasoline powered cars, we could be using our resources to build buses, trains, bicycles, and scooters. Passing legislation raising milage standards just makes it look like we will be able to keep motoring along in more efficient cars.
We need to start planning for a lot of other things that are not nearly as popular as higher auto mileage cars:
• We need to encourage young people to have smaller families.
• We need to plan to grow food locally, and teach people the skills they need to do this.
• We need to plan for soil fertility. Can this be accomplished by crop rotation, or will fertilizer be needed? If we cannot import it, can we make it ourselves?
• We need to make plans to improve the electrical grid, if we have any plans of adding more renewable energy or if we plan to use it to recharge battery powered cars. Otherwise, we are just kidding ourselves thinking that these things are feasible. (See my article here.)
• We need to figure out how we are going to maintain our roads, using much fewer resources. We may need to change some roads to gravel or dirt.
• Now that we have hit resource limits, the US needs to figure out how to live within its means--that is, not continue to increase our debt, and not continue to import more goods and services than we export. (See my talk The Expected Economic Impact of an Energy Downturn). To do this, our oil imports will need to drop significantly, as will our imports of all kinds of things from China and around the world. Our taxes will either have to be much higher, or we will have to cut back on spending.
How can we do this? Will it be necessary to ration gasoline? Will we have enough resources available to build factories in the United States to replace imports we can no longer afford? While living within our means may sound like an unreasonable goal, this result is likely to be imposed on us by the financial markets, whether we plan for it or not.
We need to learn to live without oil
Having less oil is likely to mean a much lower standard of living. We can plan for less oil with some of the steps I have suggested, but it won't make it very easy.
Not enough oil to make a difference
The oil that is off limits may not be all that much, but it is all that we have. If we are no longer able to import oil without having goods to export in return, we are going to have to use our own oil, or no oil at all. Even a relatively small amount of oil can go a long way toward making medicines and textiles and the many other goods that can be manufactured from oil. We may no longer have enough oil to burn.
Won't help prices
I think there are plenty of reasons to drill for oil, apart from helping prices. The issue of whether it helps prices only matters if one is concerned about the message Republicans are using to "sell" their legislation.
The US Energy Information Administration (EIA) has made forecasts that indicate that the additional oil will make little difference in prices, even in the future. EIA's price forecasts have been so inaccurate in the past that I think they are more or less irrelevant.
If drilling for oil makes the difference between having medicines and textiles, and not having those goods, it could be very important, regardless of the price anyone assigns to these goods.
We tend to believe so much in fungible oil supplies and very open international trade that it is difficult for us to understand that the situation could change very dramatically, very quickly.
Drilling would damage the wilderness
If I had to choose a place to damage, I would choose a place that is as far away from large population areas as possible. ANWR seems to satisfy that profile.
Drilling would only involve one small part of the ANWR. It seems to me that it should be up to the Alaskan people as to whether or not they want drill in ANWR. I understand that the opposition to drilling in ANWR has generally been from outside of the state in the past. (Transcript 22:48)
Prevent global warming
It is my understanding that even James Hansen feels that drilling offshore and in ANWR is irrelevant to global warming. There is just too little oil, and he feels that it will be drilled at some point anyhow.
Gail,
A strong reason not to go for this oil is, as you point out, it is difficult to get. This means that it will perpetuate high oil prices, just like tarsands. Currently, oil is easy to get and the high price just means that there is a greater wealth transfer going on. There is not all that much oil on the market that is actually expensive to produce yet. Oil that is hard to get is an actual drain on the world economy and thus should be avoided.
Conservation to the level where oil prices fall is the best possible response to declining oil supplies because it discourages attempts to bring these harmful, expensive-to-produce sources on line.
http://mdsolar.blogspot.com/2008/06/oil-is-too-expensive.html
Chris
My point is that if we are going to extract the oil, now is the time. I expect that some of the oil will prove to be too difficult to extract, and thus too expensive, even now. It is basically an EROI issue.
Solar has some costs that are not being properly priced in right now, namely the cost of additional transmission lines and the cost of storage, so that it can properly match demand. I think it is easy to kid ourselves that renewables are closer than they really are, because of these issues.
Hi Gail,
I was not actually making an argument about substitution, just conservation. Substitution can occur within the time frame that oil conservation can keep a lid on price. We need to convert our transportation fleet which takes about 15 years. Cutting oil consumption by about 20 or 25% in the US right away can send the price of oil way down. Further annual cuts can occur as we transform the transportation system. If we can't keep the price of oil down all the way to the end, we will still have bought much less oil at a high price than if we do not conserve now. If we don't cosnserve now, all the oil we'll ever use in the future will be expensive, even the remaining cheap-to-produce oil.
The energy sources for substitution will most likely be wind and gas since that is what is adding capacity the quickest right now. Solar is doing well enough that it can displace gas before shortages become a problem I think.
Chris
The raw data is from memory. I ran this model with more details and actual data before, but I've lost track of it and don't want to replicate the effort.
Real current data is available from the department of transportation online.
The present:
Passenger cars owned: 100 Million
Existing average MPG: 20
Existing miles per year: 12,000
Expected Lifespan: 15 years
Replacements per year at normal rate: 7 Million
New "high efficiency":
MPG: 40
If each and every vehicle scheduled for replacement is replaced with the high efficiency type, then US MPG looks like this.
Year 1: 20.0
Year 2: 20.7
Year 3: 21.5
Year 4: 22.3
Year 5: 23.3
Year 6: 24.2
Year 7: 25.3
Year 8: 26.5
Year 9: 27.8
Year 10: 29.2
Year 11: 30.8
Year 12: 32.5
Year 13: 34.5
Year 14: 36.7
Year 15: 39.2
Please accept these estimates, and understand this about CAFE standards:
They are very slow to take effect. The better model I had took into account things like the expected lag between government mandate and manufacturer achievement.
The idea that a fuel efficiency standard is fast relative to drilling does not hold up to analysis. They are two slow nethods for failing to achieve overlapping goals.
It is worth including that cars get driven more early in their lives so that you should see a closer approach to 40 mpg near Year 10.
CAFE can help, but there is much more to be done including driving less, shifting freight to rail, and starting to use PEVs and gas powered cars which don't even have mpg ratings.
In terms of costs, these necessary changes cost the same if we do them now or later because we replace cars and trucks anyway. But, for fuel, waiting until fuel is mainly supplied from expensive sources means that we can not take advantage of our market leverage to cut the price of oil and make our transformation using cheap oil. So, delay is expensive.
At this point, just about any new source of oil transforms our energy gathering system from efficeint to inefficient and this is the basic reason why conservation of our efficient sources makes much more sense than trying to suppliment with new supplies.
Chris
Chris,
True about milage on old vs new cars. If you want to include it, you need to grow the model in other ways. The short form above assumed 100% replacement with a 40mpgf vehicle.
Does a reasonable law mandate 40mpg from day one? There is only one mass produced automobile for sale in the US that meets that goal today. How long would it take Toyota to gear up for the volume? ow long would it take for competition to react?
Does a reasonable law force older vehicles to be retired? e.g. Can you force a 1995 Ford Taurus with 100k miles off of the road? What happens to the value of that vehicle if equivalents (size, comfort, ability to pull small trailer, style) are legal to own but no longer legal to produce?
There are quite a few cars for sale outside the US which do well on fuel efficiency so one might be able to phase in the standard fairly quickly.
Where I live, older vehicles that can no longer pass their emissions tests and are too expensive to fix get junked though there are some exceptions. In some sense, that forces older cars off the road.
Again, CAFE can help, but our basic problem is a fuel shortage and we need to address that with imediate conservation since it is quite clear that market forces cannot alleviate the shortage, only ration by price. The considered drill won't do anything really to help considering general depletion. In shortage situations, we use our rationing plan and that is what will drive our conservation effort. It also assures us that we will have the money available to buy efficient cars that can re-exend our range of mobility.
Chris
Hi Name,
This is an important issue, as improving vehicle mpg is going to be one of the major drivers of reducing oil consumption. The article posted by Stuart Staniford at TOD on 11th Feb, 2007 examines this in detail.
You are correct that we cannot immediately improve the CAFE standards, but last year as well as the 7million passenger vehicles(average 27mpg) there were 7million light trucks and SUV's sold in US, having an average of 22mpg. Fuel efficiency for ALL new vehicles could be raised by phasing out the lowest fuel economy vehicles, AND raising CAFE standards for ALL vehicles in a progressive, but more aggressive manner than currently proposed . The US has one of the poorest fuel economy fleets. High fuel prices cause people to use low mpg vehicles less (since the average household has 2.2 vehicles some options are available for many households).
New vehicles 6 years old or less, are responsible for 50% all ALL VMT, so a rapid improvement in fleet average mpg will give much bigger savings than you projected above.
The argument that if there is a recession, less vehicles will be sold,so can't have much effect on efficiency doesn't hold up, since in the 1978-82 recession US average fuel consumption for VMT decreased, due partly to a very big increase( for the next decade) in new vehicle efficiency.
If only that were true. In the real world there are serious delays caused by the fact that (for the most part) the research and development, followed by large scale investment in manufacturing capability, and the creation of a support network for repairs, has not been made. If we assume we are already in a PO predicament, the fact that meaningful preparations were not made ahead of time precludes a timely response. Rushing of (nearly) untested products into production at a very high scale, is associated with some serious costs. I'm not saying we shouldn't try to do that, just that a lot of costly technical glitches should be expected.
I would agree except that the timescale given is 15 years so nothing needs to be rushed. Introduce PEHVs in 2010 as planned and off we go. I don't know if you remember the MVP prizes for the World Series last year. A couple of hybrids. There is much that is already on the road getting miles logged and final kinks worked out. All we really need is the leadership to say that we won't stand for high gas prices and we'll stop using oil before we'll ruin our economy following that blind alley.
Fifteen years is a short time for Exxon to switch to only selling lubricants in the US, so there will be some resistance. The current drill everywhere stuff is a sign of desperation though. If we leave open the option to export some oil, there may be an accomodation that will be partly satisfactory.
Chris
You will remember the Hirsch report back in 2005 pretty much said this. When you add in the lag between the time the legislation takes place and the standards really are implements, plus the fact that people will be less afford to buy new cars, it really moves the effect out unacceptably far.
I don't think it makes all that much difference if the standards are passed -- auto makers are in huge financial difficulty as it is, so they don't have the resources to start great new programs. Also, they can see that it is the high mileage cars that are selling, even without the legislation.
Perhaps we've gone a little far afield. I'm arguing that we should invoke our standby gas rationing plan to achieve sufficient conservation so that the price of oil drops to $20/barrel. With or without CAFE, this is reduced consumption. Reduced availability of gas will spur the transformation of transportation even if Detroit tries to market M3 Bradley's as commuter cars. We just get that reduced availablity cheap rather than expensive.
Chris
mdsolar,
You propose rationing a use that accounts for about 40% of consumption in a country that absorbs about 25% of global consumption?
Better be very inelastic.
The world is looking for about 5 million barrels a day of spare capacity. I'm suggesting that we provide that through conservation, reducing our consumption by about that much. That would be about 25% of our use. Carpooling is enough to make that happen. After that we need to look at technological change to eliminate oil use from transportation. We want to keep ahead of any increase in world demand so that the price of oil stays low. Once we are no longer using oil, we might want to revisit drilling off of Florida for export since without similar dicipline in other countries, the price of oil will rise again once we are completely out. At this moment, the US is the only country that can unilaterally affect price in this way. I think we should.
Chris
If we were to do this by reducing out auto and personal truck use, we would have to reduce driving by more than 50% (since these categories make up a little less than 50% of our petroleum use. I don't see that happening.
It is pretty clear that using oil for home heating does not make sense anymore, electric space heaters are cheaper. http://mdsolar.blogspot.com/2007/12/jet-fuel.html
That gives you about 10% for free. Trucking is the other big use, but trains and ships can be used instead giving substantial fuel savings. No, you don't have to cut car transportation as much as that to bring the price of oil down below $20/barrel. The tricky part is keeping it down with serious technological transformation. That means relying on the "white markets" in our standby gasoline rationing plan to free up appropriate resources to push things forward. http://www.osti.gov/energycitations/product.biblio.jsp?osti_id=6307185 Supporting these markets through steady cuts in rations down to zero makes the whole thing very exciting.
Chris
How do you get millions of owners of cars, SUVs and trucks to accept rationing if oil is only $20 a barrel?
And how do you expect the new middle classes of China and India to resist SUVs if oil is $20 a barrel. It is an international commodity.
Prisoner's dilema.
There is no dilemma if our intention is to end our use of oil. There is a limit at which others can take up SUVs since they cost money. Thus, demand growth cannot outpace our cuts in use if they are sufficiently rapid. Once we are out of the oil market as consumers, we won't have as much leverage on price since we are only the third largest producer. But, we might tighten supply at that point and force conservation elsewhere. We've done a simlar thing with tobacco, forcing open foreign markets while reducing our own consumption. Some Asian currency readjustments back in the eighties were mainly about selling US tobacco.
Chris
We ration oil use in the US to reduce demand and lower the international price to $20/barrel.
Emerging markets could not replace our demand because they could not add cars in sufficient quantity or size as fast as we can retire them.
If foreigners react to the reduced price with increased demand, we could decrease US oil exports to punish them later.
Argument assumes:
1) We have enough control over demand to lower the price 700% without increasing supply.
2) Change in our saturated auto market (population 300M) with a decade of roughly constant vehicle count, can be faster than change in emerging economies (population >3B)including the world's third largest auto market, which has exhibited roughly 20% compound annual growth in vehicle count since 2004.
3) We would then have enough control over supply (having bacome net exporters without increasing production) to increase the price dramatically.
...
"In 2006, China overtook Japan to become the world's second largest car market, trailing only the United States, with sales of 7.2 million units, up 25.13 percent from a year earlier. The country was also the world's third largest vehicle producer, after Japan and the United States.
Vehicle ownership in China was 44 for every 1,000 people. This compares with the world average of 120. The United States had 750 vehicles for every 1,000 people.
Dong said the domestic car market had huge potential as the country had 57 million motor vehicles by the end of last year. Among them were 21.5 million privately owned cars, according to latest government figures. "
http://www.autoobserver.com/2008/01/china-car-sales-production-to-hit-re...
"The automobile industry in India is the tenth largest in the world with an annual production of approximately 2 million units. India is expected to overtake China as the world's fastest growing car market in terms of the number of units sold and the automotive industry is one of the fastest growing manufacturing sectors in India. Because of its large market (India has a population of 1.1 billion; the second largest in the world), a low base of car ownership (25 per 1,000 people) and a surging economy, India has become a huge attraction for car manufacturers around the world." -Wikipedia
Forcing conservation is not punishment. It helps reduce global warming. If we succeed in making our transition off of oil using cheap oil, then it is true that the price rise if demand goes up again could be even steeper since there will be much less of the cheap-to-produce oil left. But, this is no secret so those who want to continue to increase their use of oil should expect to pay more and more and more. It is just that the US has the ability to choose to make its transition at low cost, a choice that is not available to others aside from inside OPEC where some are moving quickly on renewables.
And yes, it takes a while to get the income to afford an SUV so SUV adoption will not be all that rapid even with cheap fuel.
Chris
Virtually no oil available; everyone nearly broke.
Your model shows a reduction in fleet fuel consumption of about 3 percent year on year. What new US oil find will add 300,000 barrels per day in new supply year on year for 15 years? Increased fuel efficiency provides relief nearly immediately (within one year) and continues over time. Drilling takes years to come on line.
If you add to CAFE standards a small but growing mandate for PHEVs and EVs, then you erase a small but growing portion of the fossil fuel demand base over time.
I do think we should drill the OCS and ANWR, but we should do it as part of a raft of solutions. What's ridiculous the panacea it's being made out to be. Republicans would get more traction telling the truth and then promoting a raft of options. Instead they block some reasonable mitigations and only promote the one that results in more oil dependence.
Democrats haven't helped matters by demonizing 'speculators.' So on one side of the isle you have scapegoating on the other side drilling is the silver bullet.
This assumes the oil isn't worthwhile to the proverbial 7th Generation, for I can guarantee if it is drilled now, it will be used now. It also assumes that collapse/subsidence of the economy now = the same for all time. This is a false assertion. Regardless of collapse, there is always a rebirth. This would only not be true if we fail as a species.
Patently false. This can only be supported if "stuff" is the measure of standard of living. If the standard is a sense of community and belonging, having the basics almost always available (food, shelter, clothing, safety), etc., then we can do far, far better at a much lower level of GDP and in a far different paradigm, one that is based in sustainability.
Leave it in the ground. Your arguments boil down to: we won't be able to get it later. Technology will survive, and if not, will be reborn. Leave it there. The sun won't blink off for billions of years yet.
Cheers
I remember stepping on oil tar on the beach at Galveston and swimming in the murky waters.
If there is oil to be found offshore, then I think we must do all we can to implement conservation/demand side reduction programs before we take the environmental risk associated with such drilling.
Good article Gail! I agree on every point.
One thing that you might emphasize is the time lag involved in bringing it online. I think this is poorly understood. The earlier comment regarding conservation is a fine case in point. Many people seem to think that the OCS and ANWR oil will allow a continuation of BAU. The difficulty is that in 7-10 years, BAU will already have been wiped out, and the oil that is produced by ANWR/OCS will be used in mad max prevention not SUV continuation.
Sorry if I didn't make this clear enough. I included the little graphic on ANWR oil, showing what little bit it does for the US economy, and how later.
I know that people are trying to claim OCS and ANWR will do things they can't possibly do. Even if they are making false claims, I don't see that as a reason for not drilling in these locations.
"I don't see that as a reason for not drilling in these locations."
One reason for limiting the amount of drilling in either/both places might be: There is so little oil to be had by drilling there that we should not invest in new drill rigs to get done faster. Or should we? This is really a question.
Building new drilling rigs would take both quite a bit of time and quite a bit of resources. It may also require co-operation of various vendors from around the world.
If we have lots of time and money, and it prospects are such that we are likely to have lots of additional places to drill in the future, then building more drilling rigs more sense. Even if there are not lots of additional places to drill, it might make sense if this particular source needs a particular type that is not available, and the revenue is such that it would support it. So I guess the answer is, "It depends."
I think we should at least start oil exploration in these heretofore prohibited domestic areas. If the discovered reserves turn out to be at least as large as expected, so much the better. If not, then we at least have a better understanding of how bad our situation really is.
The way oil is currently traded on the open market there is no guarantee that all of this 'new' oil will be going to US consumers, though it will have the general benefit of providing a bit more of a cushion to the global oil markets.
However, as I see it, the biggest negative impact of opening up these domestic areas is the public perception (greatly encouraged by Big Oil and many politicians) that this is going to 'fix' our current energy problem. Judging from the many letters to the editor of our local newspaper, there is a widespread notion out there that if we just 'drill here and drill now', prices will soon get back to what they were in the good ol' days and that everything is going to be OK. While such is delusional thinking, it is also comforting, and therein lies the danger.
I agree with this point - make a concerted effort to "openly and honestly" first assess what is in these areas.
One common thread in all of these "estimates" is that we do not know - either because they are unexplored in any fashion or the estmates are suspect (KSA, Iraq, etc).
IMHO - worldwide we need an "open and honest" audit, but, certainly we can do this within the scope of the USA?!
Once we know then we can decide what to do about it. One suggestion is that any extraction go directly towards or mitigate in some shorter term the fossil fuel energy that will be needed to buid such things as windmills, nukes, solar (PV and thermal), etc infrastructure. In other words - if we find it and decide to extract it then it's benefit should not to be refine it into (any) gasoline to burn for BAU.
Pete
ANWR has only had the one test well drilled in it. Never got any solid evidence that exploration has been banned in the off limits offshore areas, other than the reasonable argument that if it's off limits why spend money exploring there? Although seismic is cheaper at sea than on land.
Still the hue and cry goes on. Whoever came up with the name Blind Faith for that UDW project was a keen wit.
I knew there wasn't much information about it, but didn't realize it was that bad.
What is UDW?
Ultra Deep Water
Alaska Stratigraphic Test Well Proposal (PDF). Nice doc showing work around the 1002 area, geology, and the KIC test well from 1987, whose findings are still locked up - a "tight hole," another one of the energy industry's lewd sounding bits of terminology. There was also the 1988 Aurora offshore test well. This was part of a 2003 proposal to drill a strat test well in the NE part of the 1002 section - State of Alaska wants industry consortium to drill ANWR test well.
Used to have a big pdf showing all the leases, fields, and wells of the North Slope and NPR, quite a treat for a cartophile.
This is from the test well proposal PDF you linked. It looks like there is may be offshore oil, perhaps a little onshore oil, plus some gas, off to the side of ANWR, based on fairly old data. The hashed area seems to be ANWR, and it seems to have no drilling.
Can anyone provide a better interpretation of this?
everywhere i heard most drilling rigs are booked solid for five years or more
http://www.asiantribune.com/?q=node/11941
'The US is said to have a shortage of ships for offshore drilling. It is not unusual to hear drilling ships being booked five years in advance.'
http://www.nwanews.com/adg/Business/229416/
'the world’s existing drill-ships are booked solid for the next five years'
http://www.emediaworld.com/press_release/release_detail.php?id=86215
'Transocean, the world's largest drilling company, is building nine new deepwater rigs, and eight of them are already under contracts that run from four to seven years'
looks like if you want to drill anything you must build your own drilling fleet
API's 7 to 10 year estimate should probably be 12 to 15 years, because of this issue. If we don't start the whole process now, it will delay things further.
I talk about having to stand in line and wait for a drilling rig. Perhaps I should have said, stand in line and wait for five years for a drilling rig!
There is really only one argument for drilling for the oil in question. All other "reasons" are simply rationalizations. That argument is that the lifestyle and economic system built upon oil is worth stretching out a few more years.
Being PO aware and wanting to drill for the last little bits is akin to being an alcoholic who has determined to quit drinking, once all the bottles in the house are empty.
Shaman, Gail's argument is explicitly that it will not allow BAU, but will provide a certain small level of production for essential uses such as agricultural machines, or perhaps the production of renewables.
Dave, I understood that. The alcoholic trying to make those last bottles stretch out another week or so isn't on BAU either. It does allow him/her to stay drunk a little longer without actually dealing with the underlying issues.
It's comments like these that are beginning to make me rethink the "addict" metaphor as it applies to oil consumption. For a true addict, the addiction to the substance (or what-have-you) in question is basically a destructive force in his/her life. The difference here is that oil has some actual useful applications (medicine comes to mind) that, while not being truly sustainable, could be carried out at a reasonable pace for quite some while.
Of course most of the world's oil consumption is not used so discerningly, but lumping in justified uses of oil with the superfluous or "alcoholic" uses seems a bit harsh to me. In the long term we should strive to be as sustainable as possible, but in the interim it seems that we may have to make some concessions in regards to this goal in order to mitigate some hardships.
This is just another example of how hard it is to describe our problem(s) in one quick and easy sound-bite. Although I guess this particular case could be boiled down to "medicine good, Hummer bad".
Ray - when I made the comparison I was thinking more of the psychological state of the addict. So thanks for making me think about this in a different way. Still, your take, looking for the destructive force, actually convinces me even more that the metaphor is accurate. Perhaps nothing has done more to support the ugly industrial based global capitalist system that has hollowed out the lives of the "first world" and impoverished the "third world" than cheap oil.
As for the few good things that oil may have contributed, I'm not sure "medicine" would be near the top of my list, especially not in the U.S. where our medical system is completely broken. We could get into details, but I think the point is that this is really a matter of valuation, "medicine" can come in different forms (I am shaman, after all).
You know what? This little discussion has me thinking differently about the metaphor, too.
I think that what I was trying to say before was that while the alcoholic makes a destructive habit out of consuming alcohol, there are still people who can consume alcohol responsibly. Likewise, there are ways (arguably) of responsibly consuming oil, especially considering how it has become the lifeblood of the global economy. And while I support extreme reductions in oil consumption as much as the next person does, I also must admit that humans will continue to consume oil in the future in order to keep things running somewhat smoothly.
Of course we should try to consume as little as possible, but this still implies that additional drilling and extraction may be necessary.
I have a terrible habit of being too wordy and somehow dancing around whatever point that I am trying get across. Hopefully this clears things up.
Hi, Shaman,
Your argument is nevertheless a misrepresentation of the position outlined by Gail, as she is very explicit on this.
She is by no means arguing for anything remotely like business as usual, which would presumably include SUV's, exurbia etc, as opposed to emergency vehicles and enough food.
You are stretching her argument to suit your own interpretation - if the use changes, this is not business as usual, even if you still dislike it.
The quantities are similar to that which we could hope, after a run-up period, to produce using renewables.
This resource might give us the elbow-room to get this going.
Your analogy is therefore false and misleading.
Regards,
Dave, please don't confuse a point of view with a failure of logic. My take on this is that your attachment to the status quo is so strong that you view a slow wind down of the current economy as discontinuity.
If you are arguing for drilling in order to keep the current agricultural system up and running, you are supporting BAU (just at a reduced level). I have no interest in seeing "modern" agribusiness continue. The sooner it dies the better. (Yes I know this means many deaths, but your slow wind down means even more.) Now, that would be a discontinuity.
Shaman, you are so altering the common use of terms as to confuse the meaning.
Gail is specifically talking about a future in which road transport is much restricted, so a fair term might be :
'Business not very much as usual'
Because you imagine that a much more radical alternative is possible, you confound that with true Business as usual, where everyone keeps happily trucking.
I feel if you present your alternative as it actually is, that the vast majority of people will die, not many are going to be too interested in pursuing your ideas further.
This appears to be right and valid, as even if we screw up from trying to keep as many alive as possible, it is unclear that we will be much worse off than in the scenario you suggest - whilst the possibility remains that we may be very much better off, with many more people alive.
Put simply, it is a sucker bet, and not a sensible way to go.
Dave - I have to disagree. It is you who is altering "common meanings," apparently in a desperate attempt to protect a commitment to the world as it is. If I replace a birthday cake with a birthday cupcake because I can't afford the full cake, I'm not doing anything but reform. I've still bought into the idea that a birthday is marked by a cake.
As for your sucker bet. The numbers are pretty obvious if you think about it.
Assumption #1 - under both scenarios we wind up at 1 billion people
Assumption #2 - This is achieved through an increase in death rates while birth rates remain approximately what they are now (20 per 1000) (Note that most population projections assume a continued decrease in birth rates, but I want to keep this simple - these are examples, not commitments).
Scenario One - Fast Collapse
Starting from 6.5 billion people, under a twenty year collapse scenario, some 7.3 billion people will have died that would not have died if death rates remained where they are now. Horrific!
Scenario Two - Modest Remediation
Same starting place, but if attempts to keep things going extend the population reduction out an additional twenty years some 8.6 billion people will have died that would not have died if death rates remained the same.
Now, we can debate whether that 20 years was worth it to bring an additional 1.3 billion people into the world so that they can then die early. But unless your remediation plan can show a demonstrably decreased level of suffering for the years that we have left, then any remediation plan is going to lose the numbers battle. Or, if you think that the extra 20 years is going to allow you to keep that extra population alive...
major fundamental error here.
1) Is where you are after the reduction. In the fast collapse scenario, you are in the STONE AGE. The horses do not exist to return to middle ages lifestyles, the skill-sets do not still exist, and basically, there is nothing remaining under that scenario to prevent a total loss of all trappings of even the most basic level of civilization. In addition to that, the total loss of all medicine results in world girdling plagues that claim entire populations because antibiotics no longer exist that work. You proceed down to a population of maybe 200 million and slowly reform into tribes of hunter-gatherers. All of civilized history is forgotten and wiped away. Recovery happens in maybe 5,000 years and is agonizingly painfully slow. Probably some catastrophe occurs and mankind is extinguished before recovery becomes able to mitigate the next big screw-up.
With the "fight hard to mitigate" scenario, some vestigial population centers of civilization remain, those few areas preserve the lessons learned and the most basic capabilities of civilization. Population drops to 700 or 800 million worldwide and recovers to a sustainable billion and progress reasserts itself using sustainable technologies. This is possible because you are now doing it over a 30-40 year timeframe instead of a 10 year timeframe. Medicine remains effective although not available to as broad a market, knowledge and skills are preserved.
Both scenarios result in a great deal of death, but one means that human history does not have to end, the lessons and the good things that we have done can be preserved, the other destroys everything. The last 5,000 were totally useless if we go your way, and that strikes me as rather sad. I don't want us to be atlantis, I would rather we were "the bastards who squandered everything and left them in that mess" if it allows some form of civilization to continue.
This is the difference between "undamped oscillation" and "critically damped oscillation. Google them, you'll see what I mean.
The "major fundamental error" is yours. You are creating numbers out of your head based on preconceived notions. I was doing a basic math exercise.
Now, if you want to debate the assumptions made about the exercise, that's fine, we can do that. If you want to discuss the valuations we put on lives in various scenarios, we can do that, too. But your made up numbers and equally made up conclusion just show you to be talking out of your hat.
Further, a suggestion, (and I saw you make a similar comment below), learn a little broader history before you go spouting off about the "middle ages."
Shaman, I have deliberately refrained from the use of language such as 'making desperate attempts' and so on - I have no wish to try to characterise the nature of your arguments in a less than generous light, and hope that you will do the same to mine.
I am simply saying that most would not regard a situation with drastically reduced oil, and so heavily restricted transport, as BAU, and your dong so is in fact a very particular use, suited to your own arguments.
As for the rest, I simply have not given up hope of keeping most people alive, and cannot see it as a positive for your argument that you have already done so, nor do I find your supporting logic sufficiently strong that this must be accepted as an inevitable conclusion.
Kudos to you for setting out your position honestly, but you have ensured that it will be completely ignored, save perhaps as an apocalyptic sect.
Even if you are correct, the vast majority of people will strive to turn things around or minimise damage as much as they can, rather than give up, on the basis of what is, after all, just your reading of the situation.
It appears to me that not only are you seeking to assert that humanity is effectively helpless, but you have rendered your own input entirely ineffective.
Rgds,
Agreed.
If we are still addicted to "machine" agriculture in 20 - 40 years, we will have already lost the battle and the war.
Even if we don't have agriculture as we know it now, it might be nice to have wheelbarrows and carts. Our machines could be pretty simple.
Gail, c'mon. You're dissembling now. A wheelbarrow is a machine? Sheesh... We don't need hydrocarbons to make a wheelbarrow or a cart except for some lube. The oil we have available already is plenty for that sort of use if we aren't blowing it all out the tailpipe.
Cheers
If we aren't still addicted to "machine" agriculture in 20 - 40 years we will have lost both the battle and the war.
Labor intensive agriculture would be the worst possible thing for the entire world.
The problem is one of population. If you own a farm and need to grow food and little to no societal support then the natural reaction is to have as many children as you can.
1) Infant mortality is likely to be high
2) Older children become cheap labor
3) Children are expected to look after parents when they get old, as society can't or won't.
In a modern industrial society, especially ones with decent health and old age care, these pressures are mostly removed; The result is that most western countries can't maintain their birth rate, and rely heavily on immigration. A very effective way of population control.
No, best case is that machine agriculture is alive and well in 20, 40, 50, 100 years time, although hopefully much more efficient and well designed.
I'm personally holding out for cheap wind farms and electric tractors.
Aigooo... the number of times things must be repeated... I am NOT talking about labor-intensive farming. I repeat, I am NOT.
Please read through the full comments section to see what I mean.
Cheers
Gail,
Thanks for the transcript.
If you look at the EIA production numbers you see the real reason(IMHO) for the big push in offshore oil--declining offshore production!
Nobody will want to invest in a declining resource(3% a year) so they HAVE to paint the glass half full!
Interesting that they said we have to drill because the data is too old (aka unfavorable).
In 2002 production for US offshore(1/3 of US production) was ~2 mbpd, today it is ~1.7 mbpd, at this rate in 20 years we'd be around 1 mbpd.
It seems to me that there is much more desperation than optimism here. A Tupi 'discovery'--speculative
at best---would keep the game going and the money flowing.
I think you are right.
I know that the Gulf of Mexico is declining. Some of the platforms might theoretically be moved to different locations, if there happens to be a new sight that matches the right depth for the platform. This is part of the issue of getting better use of the infrastructure.
I think there is also the issue of how you "sell" an idea. Saving us from an even worse fate doesn't sell well, so the oil industry has to come up with something more salable.
Gail - Do you think that a platform that is not being used because the field is now dry, would meet today's environmental and safety standards. Of course, I do not know, but I know what I would bet. And, you know that the industry will be very sensitive to these issues if drilling is expanded.
When I visited the Brutus platform, it had only been used since 2000 IIRC. It was very nice. I would have a hard time believing that it would not meet today's environmental and safety standards.
The problem for the Brutus platform is that the amount of oil being pumped out is declining. In not too long, will not support having its own platform. The platform was built for a thirty year life-time, so most of its lifetime is still left. It could be used in another location, if the depth were similar to its current location.
gail,
your arguments are well reasoned, but i couldn't disagree with you more. i believe that you are looking at the value of this indigenous oil as it's present value as a transportation source. in 20-40 years, oil and gas may very well have "higher " uses as the feedstock for food, plastics, chemical and pharmaceutical necessities. i'd say it makes more sense to use OPO (other peoples oil)now. that small dab of oil in ANWR and off shore will be invaluble in the future.
Regardless of its value in the future, my argument is that we won't have the resources to get it out in the future, so we will be stuck. If we think we will need it then, we should drill now, and save it for later.
Gail -
If by drilling now and 'saving it for later' you mean to go through all the enormous expense and effort of exploration and installation of production facilities but not use that oil until later, I would have to say that is never going to happen.
Once there are the means in place to lift oil to the surface, the oil companies involved will be under enormous economic pressure to get as much oil out as rapidly as possible so as to recoup the enormous investment and start making a profit. To do otherwise would be so contrary to the interest of the stockholders as to arguably constitute corporate malfeasance.
The only way I can see this 'drilling and saving' concept work is if the US government took over the whole effort, something I also think is highly unlikely, as such would constitute nationalization of the US oil industry, which has mucho political clout in Washington.
I doubt it matters whether they pass that bill or not. The days when U.S. companies made multi-billion dollar investments that take decades to payoff are long gone. I'd hazard a guess that a lot of the interest in that bill is the short-term bennies like tax breaks for the industry, and not actually coming up with investment to actually do it.
Joule,
It is going to take us so long for us to drill and get the oil out that I really doubt the question of saving will be relevant. In order to save it, some governmental agency would have to be willing to pay market prices or above to the oil companies for the oil, and build the facilities for storage. I can't image this will ever happen. We are having a difficult enough time with the SPR.
Gail,
Very nice article! As usual..
I had a comment regarding this idea of saving the oil for later. IMO we should drill all reasonable prospects right now(or at least start the process). We need everything we can get to mitigate the problem. I fully agree with you that we will not have the resources to drill later. By the time some of these projects get to production (10 years out) the world will have come to the realization how valuable these resouces are. At this time I fully expect to see liquid fuels used more for items where there is no alternative(e.g. petrochemicals, air transportation, heavy equipment) Form the aspect of investment required, these assets will be worth more in the future. Even if we put a production limit on these new potential sources for oil, investors would still make a tremendous return.
Thanks,
Don
Certainly the world would make a tremendous return from having these resources. I don't know whether investors would or wouldn't make tremendous returns. I don't know how the financial difficulties will shake out. In a much poorer world, things may be different. It is possible these industries will be nationalized. It isn't like consumers will have huge amounts of money available to pay for these resources.
Joule, my thought is that the US government could set up its own oil company for precisely this purpose. The IOC's would continue their business as usual, maybe providing the actual work but taking none of the risks thus not having a say in the disposition. However, given the addiction in the country to that false god - capitalism - I agree that once drilled the temptation would be too strong, and voila. Oh, for disciplined government.
If this country has serious financial problems, thing could change pretty dramatically. I don't know whether taking over the oil companies is one of the ways, but it is at least a possibility.
Hirsch didn't include new offshore in his wedges, so as far as I can tell he didn't consider new conventional builds to be economically worth pursuing or having the potential to contribute any meaningful amount of mitigation, compared to heavy oil, CTL, GTL, EOR, or improved CAFE standards.
FWIW.
I have never been in the oil business but I grew up in the Texas Panhandle and developed an early familiarity and friendships with many participants. I became interested in and a student of the concept of peak oil during the 50's. During the 90's the late L.F. Buz Ivanhoe was planning the Hubbert Center Newsletter, to be sent by mail to selected bureaucrats and some of his oily friends. Buz did not own a computer. I gave him internet lessons at the local library and at our homes but he was set in his ways and I eventually became his internet liaison by default. I gave him items from the USENET (sci.geo.petroleum etc) and the Jay Hanson inspired internet groups. Jay was the first to publish the newsletter on the internet. Buz and I had both been around for the development and depletion of the Southern California offshore fields, the Santa Barbara spill and the noise from the Santa Barbara organization GOO (Get Oil Out). If memory serves Buz thought that there might be another billion barrels or so of recoverable oil off Santa Barbara but that it was of poor quality and of relatively little interest to oil companies, at least at that time. There was also a possible small off limits prospect adjacent to the Santa Monica beach. He had little hope for oil along the rest of the Pacific Coast or the Atlantic. Of course the current mantra is that if we drill off Oregon or Virginia there will be oil. I will be interested in current professional opinions.
http://hubbert.mines.edu
oil shale,it will take yrs but if you let the big boys invest they will find the technology to make it somewhat cleaner.at least we know where it is and roughly how much is there.
The big boys have participated, even to the extent of using three 30-Kiloton underground nuclear devices. I once bought a small amount of stock in Huntington Hartford's Oil Shale Corporation (later TOSCO for The Oil Shale CO). I would have lost all of my money except that fortunately they also happened to own a very valuable refinery.
http://hubbert.mines.edu/news/Youngquist_98-4.pdf
I suppose we can expect the giant mutant ants any day now.
The Oil Drum | Oil Shale - the Nuclear Option. That's bombs, not power plants. Doesn't look promising.
Robert,
You have had a place in my private pantheon ever since you commented (some months ago) on hormesis and the positive health effects of exposure to low doses of ionizing radiation. Anyhow, thanks for this fascinating 'insider' stuff.
I had a glance at some of the 'back numbers' of the Hubbert newsletter you recommended. Interesting to see (for the umpteenth time) how underestimation of ultimately recoverable reserves plus adherence to pure Hubbert Curve theory (peak oil at 'half gone' stage) has led to errors in prediction:
[Campbell 1997]
Robert,
One other place where we know that there is oil available is the Destin Dome off of Florida. See Transcript, 3:19.
A billion barrels near Santa Barbara would be nice, but it is just a little piece of the hoped-for total.
re saving it for the grandchildren: To me, this is the key rationale for leaving it there. If we extract it and "save" it in an easy-to-access location (like the SPR), everyone knows that we will tap it within years. This nation has the self-control of a four-year-old.
Even if we become unable to access it this time around, it's arguably still a good thing to have it available for the next rise of civilization, should that become necessary.
As I understand it, there wont be another rise in civilization. Industrial civilization is a one-shot deal - we cant re-mine minerals or re-smelt metals once our energy surplus is gone. We face a perpetually shrinking resource base from here on I believe (at least until a couple hundred million years time when some more oil and coal has been created).
I thought mkcmkc was talking about a couple hundred million years from now.
Gail,
Excellent posting, as always! I agree with all you have said. The oil addiction of the US right now will have to be broken soon either way (although the Canadian Oil Sands may extend it a little).
I have noticed that no one (that I have heard about here on TOD) has considered an obvious alternative to the US to increasing dependence on foreign oil (and paying for it) and becoming economically destitute in doing so. It is historically, by the far the most popular method by which militarily powerful countries have imposed their will upon smaller, resource rich countries. I.e. the capture of the oil fields by direct military (or surrogate "freedom fighters") action or other "non-economic" means. The US Navy is BY FAR the most powerful navy in the world and could easily dominate (and does dominate) ALL the world's navies put together. Even in the "heady" days of "Pax Brittanica" during the Victorian Era, there has never been a navy with as much dominance at sea as the US Navy has today. In fact, were the US to be desperate enough, NO oil tankers could travel anywhere in the world without the US Navy saying "OK". I am a little surprised that no one on TOD has done a calculation on the US having direct control (i.e. all export production or more) from Nigeria, Mexico, Venuezuela and Canada. How long would that allow the US to continue to consume oil at high levels? Militarily, I believe that it would be possible for the US to control all those Oil fields by some direct indirect way, if they were sufficiently desperate. I would think that the breakdown, or near breakdown of the American economy, with it very high dependence on oil, which might accompany a post-PO drop in production, might provide such desperation. There are few (if any) examples in history of a militarily superior nation "going down without a fight", but MANY examples of the opposite (i.e. trying to make up for lacking a resource by using a superior military). Pay attention to the stories about Chavez. A coup or a strong move against Venezuela MIGHT be an indication of such a strategy or a less severe version of it. There are many variations/alternatives to direct military invasion to gain effective control of a resource that have been tried (with varying degrees of success) in the past.
OF course, I hate to portray myself (even inaccurately) as a conspiracy theorist but as a student of history, I can't help but think this way. I have to ask if anyone else believes that the US would allow near total economic collapse without using its near total naval dominance to some effect, to "get the oil"?
Sorry, I really don't think it is an option. We have already shown we can bomb other countries, but the connection with getting any additional oil is pretty limited.
I think the issue with the military will be paying for it, and all of the oil it needs. I expect financial problems will quickly put the US in the position where it does not have resources to maintain its current military strength. This will lead to scale backs, not scale ups.
This is already the case. The economic drag of war is considered to hit at about this point. ANOTHER reason we are falling fast.
http://www.scribd.com/doc/48651/The-Economic-Impact-of-the-Iraq-War-and-...
This one is from 2007 and about the Iraq war, specifically. It claims economic impact starts to turn negative at the sixth year... gee... what a coincidence, eh, folks? Can't copy and paste. Follow the link and read the executive summary.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=810824
This is a Perfect Storm like none before...
Cheers
From Economic Impact of the Iraq War and Higher Military Spending (that you linked):
Besides sixth-year impact, it also mentions the loss of jobs expected to come from military spending.
While I agree with the lost jobs for military spending - regardless what economists might say! - the claim that developing ways to reduce GHGs is equal is just silly. GHG reduction will happen due to reduced activity AND new business developments. If they are including that and still coming to the same conclusion, then so be it. But comparing that the the black hole of military spending is BS, no?
Cheers
"I have to ask if anyone else believes that the US would allow near total economic collapse without using its near total naval dominance to some effect, to "get the oil"?"
I regretfully think that this is how it will play out if the oil supply decline is rapid. In fact, everything points to this war being already underway.
"The US Navy is BY FAR the most powerful navy in the world..."
This is certainly true - and the US Navy would certainly win any *fair* fight in the middle of the Pacific Ocean. But the coming battles will be within the very confined waters of the Persian Gulf.
"[Iran's] western mountains border the Persian Gulf. In other words, its missiles and guns look down on the U.S. ships below it.
More to the point, it has been equipped by Russia with the fastest anti-ship missile on the planet. The SS-N-22 Sunburn can travel at Mach 3 at high altitude and at Mach 2.2 at low altitude. That is faster than anything in our arsenal."
Charlie Reese
If you are a student of history, the closest analogy that I can find is the sinking of British warships by Japanese torpedo bombers. I saw an interview with some survivors - they absolutely did not see this coming:
Sinking of the "Prince of Wales"
There is a very real probability of a war in the Persian Gulf. My prediction is that America will lose both its army and a sizeable part of its navy in the conflict.
Three billion Asians look to the Persian Gulf for their future energy supplies; Russia would dearly love to inflict a defeat on the US; and there are a billion Muslims in the world who would see this as a holy war. This will *not* be a small, clean war.
Starting a war for oil is an *ABSOLUTELY INSANE IDEA*.
Unfortunately, I think that the leadership in Washington is delusional enough to give it a try.
God help us all if they do.
My dad was in WW2 and it was a nighmare - please don't start WW3.
I agree with what you are saying except that I doubt the US would really have to go after Middle Eastern Oil (and risk the Straight of Hormuz problems that you refer to). That is why I suggested the oil fields of Canada, Mexico, Venezuela and Nigeria as potential objectives given sufficient desperation on the part of the US. They all border the US directly or across a much more easily controlled Atlantic Ocean. As far the US Navy is concerned, the Atlantic is a fully controlled "pond". The major oil fields (and oil sands) in Canada are within 200-300 miles of the US border and the biggest field in Mexico is off-shore (Cantarell).
I agree completely that it would be insane politically at the current time, but the politics are going to change dramatically when Oil become really scarce. What are American politics going to look like when a majority of the population CANNOT AFFORD to use their vehicles for anything other than the direst emergencies? I shiver to think of it.
I applaud TOD for discussing these issues rationally. However, when people are desperate (too much change in too short a time to adapt), they do desperate things that are very irrational (or at least very drastic). Personally, I believe that the changes in American politics that allowed sufficient US support for the invasion of Iraq (majority of votes in Congress and a majority of US citizens in favor, for example) are just a mild prelude to what will happen when a gallon of gas costs $10 or $15 per gallon (or when it is rationed, or not available at all). A significant change in international politics (e.g. Venezuela trying to cut the US out of its exports) cannot be ruled out either. Of course, I dearly hope that I am wrong, but I fear that I am not. Hopefully, the Canadian Oil Sand production rate (and off-shore US) will increase fast enough to diffuse the worst of these "irrational instincts" in the most powerful military the world has ever seen. I am starting work in the Alberta Oil Sands next week (at a company with bitumen reserves of 6 billion barrels) and I hope to be able to do my part to help. Will it be enough? Of course not! But better to be doing what I can than just sitting here and consuming.
For those who believe that oil shortages will hamstring the US military, it is important to remember that history is full of examples of the trade-off between military needs and civilian needs. Civilian needs have usually taken second place during times of national emergency. Also, a large number of US naval vessels (e.g the aircraft carriers and submarines) are nuclear powered. Simply using those ships would allow sufficient naval dominance in the Atlantic to protect US (or allied) shipping.
Ian
P.S. So I think that there is ANOTHER good reason to start production offshore and in ANWR as quickly as possible, i.e. to reduce US political turmoil.
"The Middle East is where the prize lies."
And we've seen exactly what that implies BuCheney ever change their minds on anything?
The US may not start the fire, but they will be in it very soon afterwards and will have been responsible for it starting. If the citizens of the US, and the world, don't stand soon and say it is time to end the insanity, we will all be in a hell of our own allowing sooner rather than later.
Cheers
Glad to hear that you are starting work in the oilsands. Perhaps it will help you to understand my following comments.
"...the oil fields of Canada, Mexico, Venezuela and Nigeria as potential objectives..."
Canada: Exactly what is an invasion army supposed to seize? Over 90% of what is produced is already sent to the US. Last winter there were diesel shortages in Ft McMurray and the only way to provide diesel to an army is to take it from the equipment producing oil. The roads in the north are already overloaded with heavy equipment and would be totally clogged up by military vehicles. The last thing we need up there is a bunch of 18-years running around with bayonets and rocket launchers. Perhaps they could shoot the mosquitos.
Mexico: I guess you could seize Cantarel (whose production already goes to the US) until it tanks in a couple of years. It should play well on Fox news.
Venezuela: Maracaibo is a polluted wasteland but, maybe you could seize some Orinoco tar.
"As far the US Navy is concerned, the Atlantic is a fully controlled "pond"."
Who are they defending the Atlantic against? Seagulls? Dolphins? Whales? Haitians in rowboats?
"Simply using those ships would allow sufficient naval dominance in the Atlantic to protect US (or allied) shipping."
Against who? The Nazi U-boats were defeated 60 years ago.
Militaries can destroy oil fields but they can't raise oil production. Any deployment against Can-Ven-Mex would likely *lower* oil production a lot, even assuming that the current operators don't *mistakenly* push a few wrong buttons causing a big "ka-boom".
An overbloated US military is a gigantic millstone stopping you coming to grips with the real problems that you face.
Thinking that US might use military force to get the oil, is not really a conspiracy theory. If it were attempted, it would hardly be secret, as, for instance, the advance planning of an assassination.
Would US attempt such? If W were assassinated and the Dark side of the Force became Prez., yes, IMO. But there would likely be mutiny in armed forces because the deliberate use of force would be so badly planned. Then the Dark Side would be assassinated, and Nancy would become Prez. All before the end of this year. Very unlikely! And certainly not something that any rational person would wish for. Or fear. Especially now that we all have a Constitutional Right to arm ourselves. Keep in mind that only a very small fraction of US citizens believe that the government works for them. It is a strange country that I live in.
Gail,
Your arguments are pretty convincing. Since we are entering the age of force majeure or a state of emergency, the only really persuasive reasons for not drilling would be that it doesn't pay financially. But investors are driven by the profit principle and if they are willing to put their money where their mouth is it would be ludicrous second-guessing for others to claim that they are mistaken in their calculations.
One tongue-in-cheek comment as to the peaking issue. Clearly since the US peak has already occurred new offshore extraction won't affect its date in the least. However, it WILL have some minor effect on the empirical validity of pure Hubbertian theory: its advocates will have to concede that peak occurred just a little bit more before the nation's oil was 'half gone', or keep defining oil down to exclude deep sea drilling or oil extracted from outside US territorial waters, etc.. I don't normally like to psychologise but perhaps the idea that the Hubbert Curve's predictive powers might be adversely affected by these new ventures makes its more purist proponents reluctant to welcome their implementation. Every billion barrels added to the country's 'ultimately' recoverable reserves is another nail in the coffin of Deffeyesianism, so to speak :-).
I don't really see an issue with Hubbert's Curve. To me, the point is that we are dealing with a finite resource, and eventually production will decline. If we are dealing with a fixed location, and fixed technology for extraction, it turns out that 50% is generally extracted before the peak date, and 50% after.
If we are dealing with changing locations (adding off shore and Alaska) and changing technology, I don't think many people would expect the 50% ratio to hold.
In making predictions, there are a lot of other techniques that seem to be used more today than reliance on the 50% rule of thumb.
The drilling should wait until the majority of the US public and the politicians have realised and accepted that
(a) peak oil is happening now and
(b) global warming is an immediate, real danger to our civilization
Then and only then will the additional oil now still in the ground be used for all vital projects to reduce the impact of peak oil and to decarbonize the economy.
If this oil is used up now for consumption, in a last desperate attempt to rescue the car culture, it will be lost for ever and will not be available for these projects.
The drama unfolding now is that by the time it dawns on governments that all coal fired power plants have to be replaced by carbon-free energy as soon as possible, much earlier than 2050, all these projects will get stuck in diesel shortages.
I agree with Gail on all but one minor quibble. I think CAFE standards are now a moot point. Unless they are raised exceptionally high, the market effect of high and increasing end user fuel prices is likely to be greater than any politically conceivable fleet standard.
Joule and I are in disagreement, about the psychological/political effect of allowing expanded drilling. I think the current attitude that we could drill our way out of the crisis won't go away UNTIL we allow the extra drilling. I think once the legislative hurdles are cleared, the incentive of the oil companies, and politicians to maintain this myth will be largely gone. I think the prevalence of this attitude makes the needed attitudinal change difficult to achieve.
Personally, I think the way to sell the needed changes are to package it as BAU-lite. I.E. we can have something somewhat resembling current BAU, but with less driving, more efficient cars, slower speeds etc. Once the public accepts and begins to implement BAU-lite (and we are further down the depletion slope), BAU-lite has to morph to BAU-extra-lite. The idea is to take it one step at a time. I think this is the best approach towards making the end-of-oil into a relatively soft landing.
I don't think you are disagreeing with me. I think I said something very close to this, up higher in response to another comment.
Matt, I fear you are the victim of wishful thinking. Peak oil will in all likelihood lead to more 'carbonization' than less, since coal will remain a reasonably cheap source of energy for years to come and certainly far cheaper than wind or solar power (excluding externalities of course). CO2 emissions already high? You ain't seen nothing yet!
Do you seriously believe that when or if oil prices skyrocket to $300 per barrel anybody will really care a hoot about global warming? I reckon that the 'tragedy of the commons' syndrome will kick in with a vengeance. Oil scarcity will revitalise coal, not wind and sun. Global warming concerns will be the least of people's worries.
I'm not saying that is a good thing. But I think it is the thing we will have to live with.
Have you seen the price of coal recently?
Even so, the USA has over 27% of the world's coal resources. If resource nationalism does take effect we'll be using coal for the foreseeable future if oil gets tapped out.
They will. Once the Arctic summer sea ice is completely gone, weather and climate in the Northern hemisphere will go berserk. It has already started with e.g. two 500 year flooding events in just 15 years.
Causes of Changes in Arctic Sea Ice; by Wieslaw Maslowski (Naval Postgraduate School)
http://www.ametsoc.org/atmospolicy/documents/May032006_Dr.WieslawMaslows...
Arctic sea ice news
http://nsidc.org/arcticseaicenews/
Check for temperature anomalies here:
http://data.giss.nasa.gov/gistemp/maps/
Temps over Westantarctic ice sheets 4-8 degrees warmer than normal (1950-1980)in May 2008.
Peak oil and global warming are an inseparable double whammy. Still not understood.
"two 500 year flooding events in just 15 years"
Given n regions worldwide, where n is large, the chances of a low-probability event occurring twice in close proximity in at least one of those regions is fairly high. Plus, engineers sometimes get their math wrong--maybe they were only hundred-year floods.
Gail,
I think it's important to remember how we got to this point.
The ban on offshore drilling, and indeed much of the environmental movement, was initiated by the oil spill in the waters offshore from Santa Barbara, CA in 1969. A good retrospective is:
http://www.geog.ucsb.edu/~kclarke/Papers/SBOilSpill1969.pdf
This incident resulted from a drilling mistake as opposed to a tanker accident:
This comment did not help:
Here is a recent story:
http://www.marketwatch.com/news/story/santa-barbara-learns-live-offshore...
Another idea being floated (sorry!) out there is drilling extended reach horizontal wells from onshore locations:
http://www.searchanddiscovery.net/documents/2007/07027bjorklund/index.htm
Similarly, platforms could be placed even further out with wells reaching back towards shore.
Anyway, while it is true that the proposed legislation would not necessarily allow drilling in this area as it is within 50 miles (and the Governator probably wouldn't stand for it), the risks (real and perceived) still must be weighed against the benefits.
GOO is still active. One interesting aspect. As I recall immediately following the spill the company was not allowed to continue production of oil at the then single digit price. Eventually, to reduce the chance of additional spillage, they were allowed to produce at a double digit price. Had they delayed on their own they might have gone to jail.
http://www.getoilout.org/
And the sad thing is, as Gail points out, the benefits will not equal the costs, if the environmental costs are given their due. The amount of oil produced will not help most Americans. Therefore I can't follow her conclusion, that this unhelpful oil would be worth its extraction.
But the oil would prove highly profitable to oil companies, since the infrastructure is already there. That is, the public would bear the environmental costs and the profits would go to enrich already flush energy companies. A sort of last gift from the American people.
Nonetheless, I think the oil companies will force drilling in these areas - they are that powerful, and if that is going to be the case, then I want to see them FORCED to pay every penny of safety and restoration that environmenalists demand. They will pay to dismantle the pipelines at the end, to restore disrupted areas, to remove every trace of themselves. We'll see how anxious they would be to go in if they had to bear the true costs of their work.
Nevertheless, I wish I had a better opinion of my fellow countrymen to think that the majority would care. All they want to do is to continue off the cliff at the precise speed they are traveling now. I'm beginning to think that a fast crash might spur more reflection and thought than a slow one.
Joules,
Thanks for the summary. I had heard about it, but not read all that much about it.
The disaster was 39 years ago. I would think we would have learned some things in that time frame.
Still, I really am looking at the question of now or later for drilling, not now or never. It may be in some cases that the correct decision is never.
Why drill now?
1. In order to ‘save it for later’ you must drill it first. Since there is a long waiting list for suitable deep water / HPHT mobile Offshore Drilling Rigs (MODUS) you need to plan accordingly. Planning doesn’t start by hiring a rig and going for it.
2. Firstly, there may be some 2d or 3 d Seismics available from earlier times, but really you need 3d and 4d Seismics if you intend to commit a $600k / day rig.
3. This data then needs processing and structures defined, accepted as potential targets.
4. Regional or local geological hypotheses and plans need to be worked up and approved. Above all, you need to identify a potential source rock – without this, then you don’t have a game. Then you look for suitable structures – anticlines , domes , faulted structures etc. Then you look for seals and traps.
5. Rig charters , service hand contracts and logistics need to be worked up.
6. Then you drill and test and take another look at the (now) hard data.
Sometimes you get lucky with the first well, but chances are it can take 3-4 wells before hitting pay.
All the while, other Nations and / or Companies compete for the same services of those same rigs and specialists.
I would book your rigs now and get after the Seismic boats or crews while you still have an economy that can afford it. The lower forty-eight is going nowhere, Alaska is way past peak, the gulf is not adding enough new fields. You have the ANWR , Eastern Seaboard and Western Seaboards left.
Find out now. Determine if these areas are a going concern or a pipe dream .
And then, only then, plan Accordingly.
OK, I'm game with 3D seismic, but what are you going to look for with 4D?
Changes on geologic timescales?
Time shifted.
Time shifted what?
4D seismic is simply starting with a baseline 3D measurement and then repeating it over time to look for changes as the field is depleted. In other words, one should find and develop the field first.
Link:
http://www.glossary.oilfield.slb.com/Display.cfm?Term=four%2Ddimensional...
Yeah...
But you're not going to see any changes until you start draining the damn thing. Except perhaps something with all the action of a Fellini movie.
You said it better than I could.
Your argument only holds if "later" means within the next couple-a-few decades. Beyond that, there are too many unknowns to know whether drilling now or then is better. I don't see any value at all to drilling now. When I say later, and I speak only for myself, I am not talking about anyone currently alive. At least, not adults.
I am thinking generations later.
Cheers
I was there at the time, and you have no idea what devastation this caused. It was the event that put oil and the environment as something real.
Very good article. I am in agreement with your analysis and I too promote drill now. And I think you are correct in it isn't about getting the price of oil down. Oil is simply a valuable resource taht we will need now and in the future. BTW...I found this write up on the same topic by TOD friend JoulesBurn:
http://picojoule.blogspot.com/
IMHO I believe we shouldnt drill in ANWR or offshore
for the same reasons Gail mentions we should.
The popular reasoning goes.."Lets drill while we have
the resources of oil to drill for more oil"
I want to get on with the party and get to where we are all headed and will eventually arrive in any case.
Lets face the fact that the industrial revolution is
at closing time.
The bartender has called "last call for alchohol"
Lets use the last Petroleum whiskey shots we have on the bar counter before us to fortify our nerves to
stumble out into the nite and head back home together.
We can return too a more agrarian and social centralised society.
Screw globalisation and corporate capitalism...nobody
really was comfortable with the system anyhow.
Todays passions and leisure pursuits (hunting,gardening,fishing,crafts)Et cetera
were yesterdays mundane chores.
Tomorrows mundane chores will be yesterdays passions
and leisure pursuits.
When calories were hard to come by...its fat women who
were considered beautiful and when calories are easy
its anorexia thats in fashion...go figure!
I say lets party like its 1899..cause its gonna be
no matter how well you argue youre points.
But of course my thoughts were unsolicited and are worth exactly what they cost me too produce, never
mind.....it must be the scotch talking..say thats a
nice dress your wearing...do you come here often?
I keep telling myself I should stop reading TOD lest my perspective be corrupted by all the people who are CONVINCED that coal, nuclear, solar, wind and tidal do not exist as power sources.
You can have an industrial society without fossil fuels. In fact, a couple of centuries from now I expect we will look back and marvel that we used to power our civilisation with something as PRIMITIVE as fossil fuels. The whole idea of pollution will be hilarious - fancy wasting all those valuable minerals and hydrocarbons!
Coal buys us a couple of decades until we get solar & nuclear scaled up. Rising coal prices make solar cost competitive sooner.
We'll have useful EVs being mass produced 5-10 years from now. Few will be able to afford them - that is not a barrier to adoption. The masses will have to go without while they gradually scale them up. As long as the technology, exists, is profitable, and is growing, you are on the path to a viable replacement.
The percentage of people who can be transported on a solar/nuclear/EV base will grow each year and in time widespread mobility will return.
Drill now. Drill later. It doesn't matter. Either way, we are headed for the other side of the supply curve. A rational society would plan accordingly in a way that assumes the decreasing availability of oil. Barring that, each of us would be prudent to plan our own downslope. Some of us have begun. Those farther along will be in a lot better shape than those simply waiting for the deluge. Priority one is executing plans to avoid the need for mobility that requires an external source of energy, in whatever form.
Due to our lack of rational planning, we are entering panic mode and will drill regardless, damn the consequences. I am resigned to that. The likely consequence is that our society/world will think that drilling or even planning to drill in ten years is some kind of solution that makes the basic problem go away.
Throw in climate change and this debate is really about how many angels can dance on the head of a pin.
We cannot maintain our way of life without oil is the message. Therefore, drill. Yeh. Go ahead. Check back in ten years and tell me how our way of life is working out. The truth is that we are not going to maintain our way of life, period. Get used to it and plan accordingly.
Correct, we will not be able to sustain our way of life. Drilling is not about that at all. It is about sustaining LIFE ITSELF. The 1 mb/d that anwr can produce is enough oil to prevent a very great deal of death. It's enough oil to grow (1000000*365*40/35 gallons/ton)= 417 million tons of wheat, or enough food to keep (1590 kcal/pound *417MMton/(2000*365)) = 1.8 billion people from starving to death. It's enough to keep 1 billion people from starving to death AND keep a lot of hospitals running. It's enough to run an awful lot of ambulances and fire trucks and electrical grid repair vehicles.
Without that oil, we will be unable to perform those functions and those people that need an ambulance or a cop or food or that need the electricity in the winter will simply die. But first, many of them will get PISSED, and they will probably take it out on whoever looks handy, easy and tasty. And the ayotolla-of-rock-and-rolla comes out to play.
It also isn't about avoiding switching to less oil consumptive systems, it's about buying time in which to MAKE that switch. Li-ion batteries do not grow on trees, nor do power plants of any stripe, they take TIME, and arresting the decline rate is a needed thing in providing that time.
"Useful" electric vehicles are already being mass produced. 2500 Reva EVs built as of April 18. However, one car show has called the REVA the "Worst Car of the Year".
http://www.businessworld.in/content/view/4387/4497
http://en.wikipedia.org/wiki/REVA
I bet they go a lot better than a petrol car without petrol.
EV's can't duplicate ICE cars performance, but are a lot better than walking 10 miles carrying your shopping.
Gail,
I agree with your reasoning completely. I study Environmental Science and many of my colleagues find it hypocritical to support these drilling efforts, but we are going to need the oil, and now is the time, as you pointed out. The most iMPORTANT part of this is that politicians, specifically the next president, is able to promote drilling for this oil as well as the development of alternative energies. The recent price spike is demand driven, and requires a demand solution, i.e. conservation, not supply. I fear that the general public will latch on to this drilling idea and believe all our problems are solved.
The problem with educating the public is a separate issue. I don't know how we get them to catch on, before our politicians and agencies like the EIA catch on.
Why?
Cheers
The most IMPORTANT part of this is that politicians, specifically the next president, is able to promote drilling for this oil as well as the development of alternative energies
Agreed, if you include Non-Oil Transportation.
But how does a "Drill Here, Drill Mow, Pay Less" program tie into supporting good alternative energy and Non-oil transportation ?
Alan
While I agree that we should probably start to explore and drill select areas of these locations in a careful fashion, rather than in a desperate last ditch stand because we are flat out of oil, I do have issues with a couple of your statements.
While you would prefer to damage areas as far from population centers as possible I would prefer the opposite. Since by definition population centers have already badly damaged the land where they are located it makes far more sense to continue there rather than look for new areas to despoil. I have no sympathy for someone's view unless they are living in a tent. If it poor rich boys view from his mansion overlooking the sea that is going to be messed up well his house was built upon the backbone of the civilization that has been provided to him and they should be happy to do their part since they have gotten such rewards. Build the wind farm off Martha's Vineyard while we're at it! In fact I oppose the drilling if the wind farms are not approved as well. The human desire to mark every corner of the earth with their scat is not admirable.
My main issue though it relates to the above in a way is slightly different. You seem to believe that if Alaskans want to drill ANWAR then it should be their right and who are we to question. Well that is just bogus if you don't mind my saying so. Alaska is not a sovereign country and they do not own ANWAR. The American people do. They are the ones who get to decide about the drilling and Alaskans can participate in the discussion along with the rest of us. As someone who lived in Alaska I can attest that Alaskans often like to forget the fact that they are just one of 50 states and not a power unto themselves. Especially if they see some money in it. A common problem for us all, but not one to indulge either. I don't know how many times while the pipeline was being built I had some unpleasant conversation with a "native" Alaskan about you 'people' coming up here taking jobs that should have gone to real Alaskans. To these 'real' Alaskans someone from the lower 48 is no different than an illegal from El Salvador. A sour memory colors my thinking perhaps? Or perhaps people need to be reminded that we are all part of the same team, so to speak, and definitely in this together. This sentiment can be extrapolated to all humans being part of the same team (species) and in it together. American problems need American solutions not Alaskan solutions. Global problems need global solutions. Not American solutions. If every country pursues only what is in their best short-term interest then we all get to hold hands while we go down together.
But I do agree we need to start the exploration process now.
Wyo
I am afraid that as peak oil gets worse and worse, Alaska and Hawaii will get more and more separated from the mainland. One commenter on my recent Hawaii article noted that Alaska is in much the same position as Hawaii. It is very far away from the mainland. If oil becomes much more expensive, Alaska needs to become sustainable one its own resource base. It may not be able to support many people on this basis.
In the future, we will be more and more concerned with local interests, rather than national or global interests.
ANWR, ANWR,ANWR!! Why does Big OIl have this obsession with ANWR??? Where are the demands to use the area of northwest Alaska actually set aside for oil production. The Alaskan Naval Petroleum reserve is much larger than ANWR and must have a reasonable chance of having significant reserves or it wouldn't have been established. Drilling in ANWR is more about gutting environmental regulations than it is about finding oil.
There is the question of competing needs for resources as well as financial capital. Isn't it a better use of metals and concrete to build wind turbines which are guaranteed to provide energy for decades to come than it is risk those materials on oil rigs which have a high chance of drilling dry holes? Even a successful oil well will go dry in only a few years then use expensive secondary and tertiary methods for only a few more years.
If it were 'better' in terms of 'more profitable' smart people with lots of money would have cottoned on to it by now. Investors would be queuing up to throw money at wind farm projects. So why aren't they doing so? The burden of proof is on you.
I presume that Big Oil has an 'obsession' with ANWR because that's where the money is.
I think that wind turbines will prove to be pretty dependent on oil, because we need large equipment to service them and parts must be imported from around the world. I don't expect that wind turbines will be feasible much longer than most oil transportation. Wind just acts as an extender in energy quantity as long as oil is available. Once we lack the oil to keep up roads and global trade, wind will no longer be feasible.
If wind farms have a positive eroi, they are a good investment. As I understand it, they are fairly simple, mechanically, and dont require a great deal of maintenance. They will survive longer than the 50% energy decline stage (40-50 years) I think, which should see out all our times. Beyond that, I really don't care.
That's why I am saying we must:
(a) set aside oil for these purposes (by legislation) and not gobble it up in consumption now
(b) re-localize and re-industrialize production of vital components for renewable energy systems
Geo-sequestration of CO2 may come too late to fix our climate. Nature will physically force us (nasty climate change events) to abandon coal much earlier than we think. We will then fall down the energy ladder if we don't have at least basic renewable systems in place. My guess is we don't have more than 10 years for this.
Micro power.
Cheers
Gail, You are right. Those wind turbines built by the Dutch and other countries centuries before Col. Drake's first well are just a myth. All those ships that carried goods thousands of years ago must also be mythical because they couldn't have been built and used without petroleum.
The biggest myth of all propagated by doomers is that we cannot produce alternatives to oil just as our ancestors did for thousands of years. The diesel engines used in the transportation and construction industries can easily be adapted to use a wide variety of biofuels. Rudolph Diesel demonstrated that over a century ago. There is more than one way to build a good enough road for carrying goods and don't forget the high efficiency of rail. The creation of a new energy infrastructure is more dependent on public policy than it is on the continued existence of fossil fuels. If public policy continues to favor fighting the last war instead of the battle of building renewables then maybe the lack of imagination of the doomers will be a self-fulfilling prophecy. It is so much easier to whine about what can't be done than to work for what ought to be done.
Because there is *some* oil in ANWR that is comparatively easy to get with an already existing infrastructure to deal with it. Large, quick profits, soon, for energy companies.
I think you are underestimating the problems. We would need lots of testing, more infrastructure for high cost oil.
The "Drill here, drill now" crowd has turned an incredibly complex economic, social, and scientific problem (higher energy prices) into a simple phrase that will fit on a bumper sticker. It offers the false illusion that the only reason we face this problem is because of the short sightedness of environmentalists. It ignores the basic fact that Americans use a vastly disproportionate amount of energy compared to the rest of the world. It also ignores the years of bad policy choices that have put us into the position that we currently find ourselves (and not drilling off the coasts is the very least of these!).
The first step to solving a problem is to admit that the problem actually exists. Since when has API or EIA ever been willing to admit that peak oil is a problem?
We would be a whole lot better off environmentally if Americans ate less food. Let's limit the foods that we eat, since that would do the most good. The fact is that Americans eat a vastly disproportionate amount of food compared to the rest of the world. And Americans have better housing which is a huge problem. The fact is that Americans live in a vastly disproportionate amount of housing compared to the rest of the world. And, we could cut down on medical care. The fact is that Americans use a vastly disproportionate amount of medical care compared to the rest of the world. And let's not even mention clothing. But, The fact is that Americans use a vastly disproportionate amount of clothing compared to the rest of the world. And Americans like to travel. Americans should have a mileage guage and a one time allotment for miles travelled. The fact is that Americans travel a vastly disproportionate amount of miles compared to the rest of the world. If, we attacked these huge problems, then energy would fall in line.
You and I see the world through extremely different lenses. I don't see any point in trying to convince you that your view is incorrect.
I think there is some truth in what you are saying. I personally eat mostly vegetables and grains and a little fish, and think my health is above average as a result.
Houses are absurd in size. My kids eventually figured out that we could afford to live in a larger house, we just weren't interested.
I am appalled at the amount of clothing that is designed for at most one season of wear. The amount spent on the medical system is fairly amazing, especially when one considers the outcomes.
I also wonder about all of the running around that is done, for no particular purpose. People owning a house in the mountains (at the beach, on the lake, or wherever), and driving back and forth regularly. People flying to Florida or Hawaii to lie on beaches. I will admit I do some running around also, but I pretend I have a worthwhile purpose (writing for TOD).
If we only needed to get our use in line with the world's decline in oil, I agree these changes could do it. I'm not so sure they would be sufficient, if most of our imports got cut off because of financial problems.
I don't think he is really concerned about American diets, house sizes, clothing or travel. I think he was being snarky in responding to my comment.
Neither API or EIA is willing to admit that peak oil is a problem. API is an association, so the leaders have to follow the directives of their members. I would suspect that some of the individuals at API personally are aware of peak oil and are concerned about it.
EIA, I am not sure about. It is a government agency, so there may be pressure from above. There is also pressure not to deviate from what they said in the past. I suspect this may be an even bigger obstacle to changing their stance.
I think it will be a long time before we get the TPTB to admit to peak oil.
Given the EIA's dismal track record of forecasting oil prices, it's amazing to me that no one has called them out on it. Other government agencies use the EIA data so it's no wonder that so many bad decisions have been made.
I'm waiting for the GAO to release a report entitled, "Energy Information Agency Consistently Provides Incorrect and Unrealistic Estimates for Energy Costs" or something to that effect :-)
Both sides politically have turned the offshore drilling debate into simplistic platitudes. I personally would rather see the demand side attacked as there are relatively simple adjustments that could save far more than drilling domestically will ever produce. The market is already forcing some of these changes, but I think it would be more effective in our political leaders would make a concerted effort to destigmatize conservation.
To hold this discussion with the obvious overly
emotional sentiments leads any rational person to
conclude the necessity to promote a Manhattan scale
project to save the world...."Western capitalism"...
from the eminent apocalypse.
The poor in third world countries are gonna continue to live like they have.
They wont miss the Buick or 500 channels with nothing
on, because they never had that to begin with.
They wont long for a Quarter pounder and fries and a
trip to Walmart for some cheap plastic baubles.
My point being is....We are headed for a return to
the 1800,s
Might as well get a tee shirt that says...
"I came too the 1800,s and all I brought was this lousy tee shirt"
Or
"We went to ANWR and all I got was this lousy tee
shirt"
PO is PO so without further ado lets get on with it.
They WILL however miss the food aid and exports that keep them from starving. The medical aid that keeps plagues at bay, and the industrial textiles that clothe them.
The population of the third world has grown VERY dramatically during the last 100 years, if we go back to pre-industrial-revolution methods, ALL of those population additions will have to die. That goes for here as well as there. Amish methodologies can support *maybe* 1 billion people worldwide. This isn't about keeping hummers running, hummers are history, it's about keeping civilization itself.
I am very much concerned about the population issue.
People talk about our addiction to oil, but it is our addiction to food that is the problem. Oil allows us to have the food that we need. We really can't just walk away from it. We need to deal with the various issues, like smaller families. It is not our cars that are the problem; its our very ability to carry on with our lives.
fordprefect:
The 1 billion population number can be arrived at fairly simply and is likely a lower bound than an upper bound of stable population: From Google, world population was approx. 1 billion in 1800, which was before the exponential growth a coal use and before there was an oil industry. Also we know of technologies now that were unknown then. So I would say that future is not so bad: 'only' a seven-to-one die off.
I think the notion that the lower bound will not be significantly lower than the 1 billion number is.... excessively optimistic. It assumes that there are no particular wars, famines or pestillence. The problem is that supporting that 1 billion people involves a fully fleshed HORSE economy, it involves entire populations with different skillsets, entirely different development styles and and different value systems.
Or to use a different paradigm, the "yeast" paradigm, nutrients are added to a stable active yeast culture, immediately there is a large population explosion followed by a die back. The die-back ALWAYS drops below the pre-explosion level before oscillating back to equilibrium. The question is "are humans smarter than yeast, and I think we're pretty close to proving categorically "no".
It may be those of us in the "developed" countries are quickest to die off, because we have so little understanding of what it takes to take care of ourselves, raise our own food, and find clean water.
Hi Gail.
It may indeed. I am inclined to suspect not simply because we will stop exporting food long before we go without it ourselves and can switch diets to reduce our consumption. Many nations seriously depend on imported food for basic staples. I suspect that the third world will die first, but the developed world will die MORE for the reasons you state. But that's just me.
Wyo,
Please reread the interview.
They HAVE been drilling and with a couple of exceptions(like West Florida where they found gas, not oil) the results have been negative.
It makes no sense whatsoever to drill now(a hit or miss endeavor) when the price of oil exploration is in the stratosphere.
Wait until prices decline (and they will). The oil isn't going anywhere.
The best estimates of the CERA optimists is that GLOBAL offshore oil reserves are small, just 61G barrels, about 10% of Mideast reserves.
http://www.energybulletin.net/node/23977
Maybe that will shake you out of the trace you're in over US offshore 'potential'.
The only people who will make money in US offshore now are oil exploration company executives.
It is a good time to look at developing coal, oil sands, oil shale, etc. We know where they are. Just be sure to CCS-carbon capture and sequester them as much as possible.
I think that everyone agrees that there probably is not a whole lot out there.
I have no idea why you think the price of oil will decline.
I am sure we will develop the ones of coal, oil sands, oil shale, that make sense. I think that CCS is never going to permanently work and will require way too much energy in any event, so we can just as well write that it off. If we develop coal, oil sands, and oil shale, it will be without the benefit of CCS. We would be much better off with offshore oil.
Majorian,
No need to reread. I sincerely wish that we would not drill there. But I am the most pragmatically pessimistic person that you will ever meet. Explain to me, taking into account human nature and its unforgiving, not to say relentless, striving to survive at any cost, how you propose to talk them OUT of drilling in all these places. It is not possible. They would gladly kill you to help reduce population pressure. Best to try and manage what is inevitable.
A great weakness of many of the arguments put forth to deal with peak oil, global warming, etc are that they are based upon the requirement that humans as a whole behave altruisticly. Up to this point in history that has yet to happen. I am somewhat pessimistic on the prospects of such behavior.
Your turn. Wyo
A great summary. The best reason I have to support expanded drilling is to knock this nonissue to the side. It's a nonissue for short term supply or prices and it distracts from harder choices that need to be faced sooner than later.
There is a question of political tradeoffs. When Minnesota agreed in 1994 for above ground nuclear cast storage, we got an environmental tradeoff for the expansion of windpower. Perhaps we could use a little bit of leverage here and "trade" opening these regions to exploration for some serious money towards alternative energies OR towards a consensus that the U.S. SHOULD be planning to reduce our consumption of oil, perhaps a plan to set a "floor" price for oil as a way to reduce consumption and get alternatives going.
WELL, in short, I guess I'd support a little blackmail - holding offshore drilling hostage UNTIL the U.S. accepts a comprehensive energy policy for the future, including goals that fossil fuels consumption will be lower in the future.
I like your point about "knocking this non-issue aside." As long as people think it might be there, they have unrealistic views of what the future might look like. Having a proper picture of the future would be helpful.
I am afraid I am not much of a politician. I just think we should do what is right, regardless of what else we can buy from the deal.
It seems to me it could easily have the opposite effect. Drilling has been so oversold that there is now a widespread belief that it is The Solution. Since it will take many years for the new oil to come online, it could in fact easily distract from those harder choices - why should I worry about making major lifestyle changes now, when all that lovely offshore oil is right around the corner? Just tough it out for a bit and everything will be fine.
Further, if only some offshore areas are opened up right away then, in a few years when predictably supply falls short of expectation, the argument can simply be recycled, ie the real problem is that we did not open up *enough* supply. And so the logical end point is that everything is opened up for drilling. At that point, assuming anyone is still paying attention, it will be very easy to find another scapegoat, and in the meantime the only ones for whom all that drilling really made a difference was the drillers, and several years of possible real mitigation and adaptation have been frittered away.
Now if those advocating drilling were very clear about how little difference it would make to price and energy independence and there could be a reasonable debate, that would be a different matter. But debate is now reduced to the level of bumper sticker slogans, so I guess we are just stuck with "Drill here Drill now Pay less".
Agreed drilling could cause complacency, but at least I'd hope we'd have more honest assessments of the reserves and projections of the difference they'll make.
Currently the media is filled with village idiots parroting idiots:
http://www.startribune.com/opinion/letters/20615414.html
... "When we [the U.S.] have two centuries of gas and oil reserves under both land and sea along with improved and improving technologies to explore and develop in an environmentally responsible manner, why would anyone not want to develop our natural resources to everyone's benefit?"
When surrounded by such nonsense, I just want to give up. It's my own desperation. Everyone believes what they want to believe.
I'm not looking to punish oil companies or their stockholders, but since we have this leverage point, I just want something in return. So let the addicts have their dregs, but let's create a more creative plan as well that envision what we're going to do when these run dry too.
I end up more and more in Kunstler's Long Emergency camp every day. We could perhaps solve any one or two of the dozen politically intractable problems we face if we looked at them honestly, but combined together, we've got a long way to fall, and our collective expectations need to change to see the other side.
Regardless of what folks are saying now, I expect the US will be in bad enough shape in the next few years that people will not be driving SUVs. The majority will not be driving vehicles at all. We will be doing well to keep the electricity on. Many other countries may be doing better than we are, but we will not be able to maintain our 25% share of the world's oil.
Based on the representations being made now, people may still think the new oil will be "The Solution", but if they no longer have cars in a few years, I am not sure that belief will make all that much difference.
Many, perhaps most, will not be driving, but the rich will still be driving SUVs.
In traditional India, with Malthusian limits to population with starvation, obesity carried high social status with it.
You are supporting "Drill Here, Drill Now, Pay Less" which will result in our last oil being burnt in a futile effort to preserve BAU.
Immediate drilling may give us the maximum # of barrels, but it will also give us The Lowest Possible Overall Utility from that oil. A wait of just 2 or 3 years may see a change in perspective. The focus needs to be on creating a Non-Oil Transportation system, NOT on "More Oil".
Alan
In Zimbabwe today, Robert Mugabe and his entourage drive around in a fleet of SUVs, and his Ministers all have SUVs (AFAIK, news reports only mention SUVs), despite the extremely critical shortage of fuel there. SUV's give status since they waste fuel.
As oil shortage bites, I doubt that the prevention of the exploitation of reserves will be possible, and those who would seek to do so are, in my view, likely to be marginalised.
Much better to spend the political capital on nailing some of the pirates who have looted the system, awarding themselves huge bonus's by building debt pyramids.
Reversing tax concessions and taxing scams should make the financier SUV driving classes get on their bikes, and is in tune with way people actually react.
Pointing the finger at those who have profited massively form bankrupting the country should be more than practical, and amny will be eager to make the connection.
In that environment driving a SUV might not be good for your health.
OK, if we put ANWR & OCS on the table, my question is: what is big oil going to put on the table in return?
These should be worth a lot, and I expect a very high price.
My fear is that these are just going to be handed to them on a silver platter.
These folks have businesses like any other business. They have huge amounts of pipelines and other infrastructure that need to be maintained. They need the new oil and gas to keep the whole system going.
The oil and gas will already be at a very high price, because it is in high-cost locations and because there is so much infrastructure to maintain.
The one thing I might like to see is more emphasis on using US workers and US contractors whenever possible. I think we have lost sight of the need to provide good-paying jobs to US citizens.
But they are not going to be able to get enough oil and gas to keep the "whole" system going. Did API talk about industry decommissioning schedules or show how they plan to ramp down their pipeline infrastructure capacity over time? Industry investors would certainly find any such statements to be of interest. The industry is merely trying to maximize return of their existing capital resources -- nothing surprising there. This makes perfect sense from a business perspective, but helping them maximize oil production rates is perhaps not best for society. Are you saying that the best thing here is to help the oil industry maintain maximum production rates for as long as possible so that they can maximize their return on investment? If not, then how should we moderate drilling and plan for the future?
I do not even know if the oil industry will continue to exist over the next thirty years in its present form. We will be a much poorer nation, so it is not clear what the return on investment will be. My point is that society will be much better off with this oil than without. I don't really see the issue with whether the oil companies are able to make money from it. Why are we so worried about the oil companies? We need their expertise, and their profit percentages haven't been any higher than those of other companies.
You said, "My point is that society will be much better off with this oil than without."
As you note, it is hard to say what will happen in the future, so this may or may not be true. Assuming for the sake of argument that this is true, I ask, would society be better off extracting this oil as fast as practically possible, or would it be better to spread out the extraction over a longer period of time? This is not a rhetorical question.
Your post makes the argument for "starting now" but says very little about what "waiting a while" means. Most of your post talks about environmental objections, which are not "waiting a while" objections at all but rather are "never drill" objections and so are something of straw men in the context of an asserted "waiting a while" versus "start now" framework.
You do discuss "waiting a while" "objections" under your discussion about saving oil for our grandchildren, and one sentence under "we need to learn to live without oil", but the entirety of your reasoning with regard to the "waiting" issue appears to be that future generations may not be able to extract this oil, that it makes more economic sense to extract the oil now, and that not starting now will reduce our standard of living. This is a pretty minimalist exposition of the "wait a while" position discussed frequently on this website.
What you don't do is discuss whether there are any advantages to society to plan for how fast to extract and how to prioritize this effort. You have identified a number of possible advantages to "starting now" but you do not identify possible societal advantages for "waiting a while", such as maintaining a domestic energy reserve for periods in the future with long-term supply constraints, allowing the cushion of domestic oil extraction to be longer and thinner or backend-loaded, as opposed to your proposal that extraction be frontend-loaded, and ensuring oil for minimal manufacturing needs over the long-term.
My point has been that a simple to-drill-or-not-to-drill perspective overly simplifies and politicizes this debate and keeps us from looking more deeply at how to deal with the coming years and decades. The question about whether or not to drill ultimately will be answered by politics. The question about when, where and how can should be an issue for a national debate about meaningful energy policy, such that the political debate is better informed.
If at the first experience of oil pain (and many of us are feeling it) our response as a society is to get as much as we can as fast as we can, what does this say about our ability to deal with the much more severe oil pain that is likely coming to us all? Perhaps you believe that an unfettered "free market" should handle this, and that is certainly a common belief, but such belief is nonetheless one belief system among many (and some on this website that such belief system is the cause of the crisis we face). Others believe that our society, through the agency of government, can plan for the future and thereby increase the general welfare.
You say, "Now that we have hit resource limits, the US needs to figure out how to live within its means . . . ."
I absolutely agree with you, but would add that living within one's means also includes using limited resources prudently over time so that one can find substitutes or learn to live without. The question remains, is drilling as quickly as we are able really the most prudent way to use these resources? Or will it be necessary as a society to exercise some degree of self-discipline and not continue to eat our seed corn at a breakneck pace?
And yes, our society and other societies offer many examples of setting aside resources for the future and planning in ways that ensure the greater public good over time. It's just that many in the last couple of decades have adopted a philosophical approach that doing this is neither possible nor desirable. But, I think that an absolutist expression of this anti-government philosophy flies in the face of many big and small examples that common action can increase the common good.
And, I did not breath one word about the appropriateness of oil company profits, so please refrain from implying that I did by bringing it up. In our capitalist society that oil companies make a reasonable profit is important, but I don't think that maximizing oil company returns should be our predominant concern in the coming years, nor do I think that the important decisions about when, where and how oil is extracted should be delegated solely to them. Yet, that would seem to be the practical political result of your framing and discussion of this situation as a simple drill-or-not-to-drill question.
I have long supported drilling ANWR and increased off-shore drilling, BUT only after it has been 6 months since I have seen a Hummer, Expedition, Excursion, Sequoia, Tahoe, etc. on the road.
Two days down, 181 days to go.
We need to save this oil for our tractors, garbage trucks and truly essential uses, and not for the waste we have today.
Yes, we will likely be deep in Great Depression II by the time this last large bit of domestic oil goes into production, but that is exactly when it will do the most good.
Best Hopes for Prudence at Last,
Alan
Alan, we're talking about 7 years out for production to even begin. SUV sales are off 50% already. Waiting until the existing fleet dies of old age is... insane, it is too long a horizon. Most if not all of the large vehicles on the road today are there because the owners cannot unload them or afford an extra vehicle.
SUV sales are off 50% already
OMG !!
We are STILL making them !
EVERY last SUV assembly plant should be shut down IMMEDIATELY, the workers laid off or retooled and special "fuel guzzler" license tag taxes of $500 (or more) every year till they are ALL scrapped.
How can you justify drilling in ANWR, off California or anywhere when those symbols of waste and conspicuous consumption (waste resources and consume just for social status) are STILL being made ?
Alan
Alan - not a very constructive comment considering your bias. And, perhaps I am wrong and maybe it is just a hobby, but are you trying to make a living(or to eventually do so) off of increased rail? I could be down at city council here in Edmond, OK demanding that they shut down the mostly empty buses. But, I kind of believe in live and let live. I have an SUV, but no children nor grandchildren. So, at 67, the energy usage attributable to me and my direct progeny is less than most. So, do not tax my SUV any more than it already is.
Your argument is bunk.
Because I did not murder, is it is OK for me to steal is the essence of your argument.
I also have no children and hope to use less than 60 gallons of diesel this year and less than 3,000 kWh. I wish I could use less and I am trying.
You understand the implications, yet you continue to squander and waste oil.
Alan
Gail
You say that we should drill now because we can get the maximum AMOUNT of oil if we drill soon.
I say we should drill later, first production perhaps 7 years after the last megaSUV goes away (hopefully due to high prices in just 3 or 5 years from now, but possibly longer) because I want the maximum UTILITY from that oil.
80 barrels used for farm tractors, garbage trucks, medical services and building Non-Oil Transportation has dozens of times (100x ? 1,000x ?) the utility of 100 barrels of oil used by soccer moms or commuters in SUVs.
Oil for bicycle tires or oil for the last of the SUVs ? Which has higher value ?
So we take a small hit in quantity ultimately burned (good for the climate :-) BUT we use oil for only the MOST important uses, and the arrival of this oil may well mark the bottom of Great Depression II if we use it wisely.
And no, Fordperfect, it is not insane to wait for the last Hummer et al to be scrapped and American auto culture to meet it's inevitable fate. I predict that the new Hummers that were sold this morning will not "wear out" but will be scrapped due to high gas prices.
And those owners that are trying to sell their SUVs can always get a couple of hundred $ from a scrap yard, the perfect buyer of used SUVs. 25,000 or 250,000 miles matters not to them. Hopefully, they will crush many SUVs with less than 50,000 miles on them.
Alan
By the time we finally get the oil out, there won't be any SUV's still on the road. Oil will be way too expensive to put in them. The owners will have taken them to SUV recycling centers or abandoned them.
I think it is a non-issue.
No, it is not.
Immediate drilling will support the BAU status quo, slowing the rate of crash AND, worse, prevent a later rebound when the oil COULD come on the market.
It is difficult to forecast the rate of change, but even at $12 or $15/gallon I expect SUVs to persist in some numbers for a decade+.
Conspicuous consumption is DEEPLY ingrained in our culture.
The issue is do we slow the rate of change by drilling now, or do we save it for a rebound after we have bottomed out ?
There is no doubt in my mind that a smaller quantity coming on-line later will have MUCH higher utility than "drilling now".
I hope that a later 1.3 million b/day to a suffering nation scraping by with 6.9 million b/day (domestic and some imports) could spark the rebound and recovery to a non-oil and sustainable future.
New oil in 2016 will just be "wasted" reducing the immediate suffering and slowing the unavoidable adjustment.
Economic analysis should support that conclusion.
Maximize the utility of our remaining oil !
Please rethink your position,
Alan
PS: I am using the absence of SUVs as a marker of a change from a BAU mindset. This nation once survived, as recently as 1985 or so, without SUVs. Other nations, such as Japan and the EU, manage to feed their people, deliver medical care, preserve social order, etc. without SUVs. From an engineering POV, SUVs are horribly inefficient and lack utility for specialty jobs.
Therefore, there is no NEED for SUVs per se, they are just waste and conspicuous consumption with a 101 justifications & rationalizations. More fuel efficient minivans, station wagons, panel vans and pick-up trucks can do what "needs" to be done for less gas.
Alan, you clearly didn't read the OP. If we drill today, then in 2017 when the first oil comes out, domestic production will be a bare 4 mb/d. I doubt we will still be able to successfully buy any for import, so we're talking about a time when the US is consuming roughly 4-5 mb/d.
Waiting till everyone sees the train before you hit the brakes is just dumb. It is clearly the action of an ideologue, rather than a rational person.
Whatever the level of production, as long as the mindset does not change, ANY production will be wasted on a vain effort trying to preserve BAU.
We need to use our LAST oil for the maximum possible utility !
And preserving BAU is just NOT "maximum possible utility". It is a waste, regardless of how much suffering it might delay (but not prevent).
As I said, six months after I have seen my last megaSUV, I am willing to start drilling. The reason is that SUVs are a marker of a social mindset that will, with near perfect certainity waste our LAST chance !
There are no guarantees that waiting will not waste our last drops of surplus oil, but "Drill Here, Drill Now, Pay Less" will waste it with 100% certainty. And that is what Gail supports.
Seek not less pain and less disruption but Maximum Possible Utility !
Alan
Oil that never gets extracted has 0 utility.
I am very glad you are not a decision maker.
This is my point: if we can't extract the oil, it has no utility. To have a chance of extracting the oil, we need to start now.
You've made no argument against it not being extractable in the future, only for it being difficult for a while. I find your thinking surprisingly short term considering your general take on things.
Alan's argument is clear and well made. Thinking in terms of this generation only, and in terms of economics, is what got us here. Time for a new paradigm.
By the time we are at 4 mb/d for this economy, ANWR, et al., will be even less meaningful. Finger in the dike, so to speak.
Cheers
dup
Gail,
Thank you for another excellent post. A thought occurred to me when I looked at the graph of US production history.
The maximum rate of US production was about 10 Mb/d in 1970; current US consumption is about 20 Mb/d.
So, even the maximum historical production rate was only able to support *half* of current consumption. The postwar US consumption binge has been supplied to a major extent by cheap oil imports - the current level of consumption would *never* have been possible with domestic production alone.
All the talk about "energy independence (for oil)" is baloney. To achieve any semblance of energy sustainability, the US will have to cut consumption by at least 50%.
Twenty million b/d of consumption is a *huge* number for a single country. Conservation is absolutely mandatory under any scenario that I can imagine.
Not as bad as you might think. The oft touted number is 5% of the world consumes 25% of the oil. The EU is 8% and uses 18%. it's half as much percapita, but... Also, comparing apples to apples, compare US consumption to canada. The *other* new world wealthy low population density nation. Canada uses *more* oil than the US per capita. There is a habit of saying "the US" consumption, but the problem is really only partially us, it is world.
20 MB/D is a lot of oil, but it really isn't far from reasonable *given* cheap imports. Everything we did made sense at the time.
"Everything we did made sense at the time."
One of my uncles worked for Sunoco (in Boston, IIRC) and he used to tell me about the *enormous* amounts of oil under Lake Maracaibo, Venezuela (late 1950's or early 1960's). He really believed that oil was an almost limitless resource.
People made rational choices based on what was known at the time - I can't criticize anyone for that.
When American production was in its heyday, it could only provide half of present-day consumption. The growth in consumption was possible because there were many undeveloped countries that exported but didn't consume.
Now, the rest of the world wants to emulate the American model. On a global scale, this can't work because everyone wants to consume and (almost everyone) needs to be an importer.
Peak oil aside, the American model could never have worked for more than a small number of countries.
We need to understand and accept that there is no alternative to consuming less. Or, in the words of JHK, we need to "make other plans" as to how we are going to live as a society.
It has taken a long time for the scale of the problem to sink into my own conciousness. I'm still trying to get my head around it.
Hurts the head doesn't it?
Yes, the American explosion was only possible due to an accident of history. but my point was that even if the US somehow magically dropped to european consumption levels without crashing anything, we'd still be screwed. It would have essentially no impact on the situation. It would free up 10 mb/d which would temporarily drive the price down, but population growth, economic growth in exporting nations and developing economies, and production declines in existing fields would swamp that reduction in 2 years. This situation is *bad*.
That's part of the rationale behind the "silver BBs" approach, the simple fact is that even if the world were to drive a stake through the heart of the US, there would still be peak oil with no viable alternatives.
I think you are right. It is not a good situation.
fordprefect,
What's magical about driving the types of cars European and Japanese drive? A 50% reduction over 10-12 years is very possible with the correct legislation, and BEV and PHEV's are viable long term alternatives. Mums could still continue to drive the kids 1-2 miles to school, and i can't see how reducing oil imports by 70% would crash anything.
Its probably academic but US motorists are going to have to conserve, either by replacing existing vehicles, driving less, especially non-essential trips or have either rationing by quota or rationing by price. If only rationing by price, you have to wonder how high prices will have to go, certainly more than $4 a gallon, more than $8 a gallon( European prices), but probably more than $12 a gallon, where the real cost of driving a car would be about twice as high as now.
The US has been unfairly blamed for a lot of ills in the world, but its hard for the US to duck a big part of the blame for todays high oil prices.
AH. The old "smaller cars" point. That's a fun one. First, we're looking at 2-5 years until the safety standards can be lifted allowing the use of those cars on the road. After that, the importing can begin. After that, there's a most likely 5 year ramp-up in consumer acceptance and management infrastructure (This is for reasons other than the ones you may be thinking. People are hesitant to buy a car that they don't know if they can get parts for.). After that your replacement of the existing fleet takes 15 years. So we're at a total of 25 years or 2023 at which time the population will be quite a lot higher.
When I say "magically" I mean that it happens *tomorrow* this is so that gains are not swamped by population increase, resource competition, or whatnot.
Bull. Malthus, Rickover, the Club of Rome, Jimmy Carter and Hubbert would all strongly disagree with you, just to name a few. Let's not toss out platitudes and bullshit; they mean nothing and get us nowhere.
Cheers
Calgarydude,
That's a good point. Another one I hadn't been aware of until I looked at the data is that we have been importing oil for a very long time -- back to 1902, when EIA import data began. We have never lived within our means for oil. We were fortunate to have other good resources like soil and water and minerals, and use them to produce exports.
We got behind shortly after oil peaked in 1970, and have had a balance a trade problem ever since.
We need to stop using so much oil.
It wasn't that bad. We did export large quantities of oil for half of the 1900-2000 period, but while our oil exports were a large proportion of our oil production, they were a small total amount of our oil.
10% of a million barrels a day is only 100,000 barrels exported every day. Now we import 12,000,000 barrels a day, which is 120 times as much imports now as we exported back then.
The only way I will ever support this drilling in ANWR and the restricted portions of the OCS is under at least one of the following conditions:
1. If our society experiences a massive paradigm shift beforehand relating to population growth and resource consumption policies.
And/or,
2. If the government nationalizes these projects and is forced by law to plow every bit of profit from these projects back into renewable energy projects.
Or,
3. If private companies maintain control of these projects, but are forced by law to plow every bit of profit from these projects back into renewable energy projects. That means BP, Exxon, etc. still maintain control, and they still get to make a profit, but all of that profit must be spent on things like building up a huge wind power division of BP, for instance (and this wind power division will then go on to make lots of profits for BP that BP can spend on anything it pleases...so clearly the private oil companies get their share of the pie in this arrangement, just in a way that also happens to help society in general).
I think option 3 is probably the most realistic.
Gail,
Another great job of hitting the key elements of the debate. I’d like to take advantage of all your hard work and toss in a few extra points.
To clarify for those who might be confused by the popular presentations, there has been no ban on offshore drilling. Thousands of wells have been drilled in the federal OCS (Outer Continental Shelf) and state waters off the coast of the US since the government stopped offering leases in certain areas of the OCS. In fact, the Gulf of Mexico OCS, including the Deep Water trend, is currently producing more oil than any other province in the US. At last count, the Deep Water GOM OCS delivers 18% of all US oil production. In 2007 OCS production yielded over $27 billion of reserves with the American tax payer receiving $6.4 billion of that in royalty.
As far as reserve potential for other areas of the OCS which haven’t been offered for lease over the last 26 years consider the following: Many are projecting that Brazil will become the 3rd largest oil producers in the world in the next 10 to 15 years dues to recent discoveries. You should be aware that 15 years ago no one, including the oil industry, gave any consideration to this potential. The same can be said of the US Deep Water OCS: before 1990 no one considered there to be any oil potential in this area. And besides, there wasn’t any existing technology to develop it. And it would cost too much if they could develop it. And it would take too long for it to make any difference.
Does that string of rationales’ sound familiar? Consider where we would be today if those were the deciding issues in their time. What would gasoline cost now if we didn’t have that 18% of the oil? Would we really miss that measly little 250,000 bopd coming online at Thunderhorse this year? Or those reserves coming on from the other Deep Water fields over the next 5 years? Of course, these DW fields decline much faster than the big onshore fields of yesterday. Might be nice to have some new reserves coming online to replace them in the next 5 to 10 years when US oil begins a very rapid decline.
As far as reserve potential, we already know how accurate “they” were by not seeing the potential off Brazil or the DW GOM OCS. I suspect many are unaware of the great discoveries of the east coast of North America there have been over the last 30 years. The reserves developed measure into the billions of bo and trillions of cubic feet of NG. And all within a very short flight from New York City. These fields would, of course, be on the Canadian side of the US border. Hibernia Field came online in 1997 and reached a max rate of 240,000 bopd with an ultimate recovery of 1.2 to 1.9 billion bo. Additionally, a new field with 250 million bo has been discovered nearby and will be produced through the Hibernia facilities. Of course, this new field might not have been developed had not the Hibernia infrastructure not been there. But this is how all offshore oil provinces are developed…just as the GOM OCS was beginning in the 1960’s.
I’ve been a petroleum geologist for over 30 years and I have no idea what the actual reserve potential is off the east or west coast of the US. I also know that no one else can come up with a reliable estimate. It will take time and money to determine what those numbers may be. It’s difficult enough to estimate recoverable reserves after they’ve been drilled. Anyone who says they can make even a rough guess with drilling holes is either a fool or a liar. Harsh words, I know. But many so called “experts” are throwing numbers around that have no real basis in exploration science. And these include the pro-drilling group just as much as the anti-drilling faction.
A small but important point for the question of the high cost of such projects driving up the cost of oil. It doesn’t work that way. Just the opposite: it’s the high expectation of oil prices that justify many of these projects. During the 1980’s I saw many operators sell their oil/gas for less than they had invested originally. Oil sold for what the market would bear ($10/bbl in 1986) not what the operated needed to secure a profitable rate of return. The companies had no choice…cash flow was critical. If oil had dropped to $20/bbl right now BP would still put Thunderhorse online at 250,000 bopd even if it meant they would never recover their initial investment. In the shortsighted world of the stock market cash flow is king.
No amount of new offshore drilling, regardless of the billions of bo that might be found, will not prevent PO. We began that trip the day Col. Drake drilled that first well. But, as Gail put it much more gently than I, it will give us a little more time to make adjustments. My biggest concern is that we may gain a few years on PO but then waste this extra span by not developing serious conservation efforts and alternatives. When Saudi opened the valves in 1986 and dropped oil to $10/bbl the general population along with all the politicians squandered any chance we has to make a smooth transition. I was with Jimmy
Carter and his plan to raise gasoline taxes to force a change in consumption habits (yes...an oil man did vote for Jimmy…we engineers like to stick together).
Pick apart my argument as hard as you like. I’ll respond with a complete and honest answer. I have to reason to fib: the longer our country ignores PO the better off I’ll be financially. But I can be just as happy with a lot less.
Development of the Hibernia field off Newfoundland required the creation of new technology for tracking (and sometimes deflecting) icebergs that could hit the rigs. The Ice Forecasting Centre in Ottawa funded long range aircraft equipped with SLAR (Side-Looking Airborne Radar) and RadarSat satellites. By the early 1990's, they had systems in place that could track icebergs 24/7 through all weather conditions including the dense fog that is common for the area.
Development of the Brazilian fields and possible US OCS fields is going to require a huge investment in new technologies as well. I certainly think that it is worth the effort to intensify the deep-water efforts.
There are engineering solutions to the current energy mess - deepwater, tarsands, geothermal, tidal power, wind, solar, thorium-cycle nuclear, and lots more.
It would really help if lifestyle changes helped reduce the size of the current mess. And it is essential that politicians don't create new messes before we have fixed this one.
ROCKMAN - thanks for that post. I suspected as much. All I can say to that is GET BUSY! and let the oil haters figure out how they'll live without it. Ever read what life was like in 17th century London? Hideously polluted I hear.
ROCKMAN - thanks for that post. I suspected as much. All I can say to that is GET BUSY! and let the oil haters figure out how they'll live without it. Ever read what life was like in 17th century London? Hideously polluted I hear. If industrial society breaks down, that's what we go back to. No EPA to enforce any rules in the lawless anarchy that results.
Thanks. It is helpful to have some thoughts from someone who has worked in the oil and gas industry.
I think the government needs to weigh the opportunity cost of the investments required to recover the additional oil in these remote areas and perform cost/benefit vs. other investments.
Could the government direct the oil companies to invest in conservation measures that would add up to more "oil" than is in the ground? Or could the government take the windfall profits away and invest in conservation directly?
For example, since this scenario has a significant time headway, what's the price of the rigs/pipelines/engineers etc. vs. the price of a national passenger rail network? Would a national passenger rail network offset more oil than is recoverable in U.S. territory?
I think the problem with your thinking is that we really need the oil, if we are going to have things like a national passenger rail network. Postponing investment for oil won't get us farther ahead in the long run, since oil is so critical for creating and running trains, fixing up the electrical grid, and other things to help keep things going without falling apart completely.
I really don't see an issue with windfall profits. I guess I have worked in the corporate world long enough. Oil company's profit percentages aren't higher than other companies. I have more of a problem with banks and the financial industry. They have done an amazing amount of idiotic things, and saddled the rest of the world with huge interest payments which people will really not be able to pay in the future. They have helped us get into a lot of our current problems. Why not penalize banks instead?
I'd like to put a vote in for penalising the executives in the coal industry, and the relevant compliant legislators, where mountains are topped in the Appalachians and mercury dumped in the rivers, but amazingly that is a OK, whereas to build solar thermal apparently environmental impact statements are awaited, or no work can go ahead!
since oil is so critical for creating and running trains, fixing up the electrical grid, and other things
Well, I think the assumption that oil is a necessity for all things modern is painted with a too large of brush on TOD sometimes, but this is another topic.
If oil is so critical for creating and running trains, then it's also critical for digging into the seafloor, building drilling rigs, pipelines, and all the other infrastructure required for a large-scale development of a major ocean oil extraction program. The assumption that all this infrastructure is "already there" is just API propaganda IMO. This operation will require MAJOR investment. I'm skeptical that the benefits outweigh the costs - especially opportunity costs. Keep in mind that if, as you imply, an economic emergency is looming, America's historical restraint to slap unfair taxes (or outright seizures of assets) on large corporations is tossed out the window - the game will no doubt change. There is nothing in the constitution that prohibits the government from taking control of the oil industry - especially if it actually is so critical to prevent society's collapse.
I'm not saying this would be a good thing, I'm saying the American people do actually have the power to force the best return on such a critical investment. The mantra from many on these blogs is "we need everything". And we do, except we don't have infinite resources to development "everything". We need to prioritize our dwindling capacity for capital expenditures wisely. Investing billions and directing energy and top engineering talent to extract a very small amount of oil in very risky and marginal areas is not wise - especially since, as other posters have pointed out, the U.S. still hasn't even figured out how to not grossly waste, much less conserve, oil(e.g. Hummer tax credits, sprawl, 15 lane highways) even if we did have unlimited capital, it could all be for nothing once given to Joe Sixpack.
Bottom line is that conservation investments would likely "produce" much more oil with the same level of investment, and the "production" would be sustainable long term. Wishing for "we need everything" solutions is no different than wishing for a flip of the switch hydrogen economy.
My take on all this sudden drill drill drill hysteria is that this is an election year and its purpose is to get votes.
The republicans want convince the public that their democratic opponents are to blame for high gasoline prices. To the politicans driving this narrative, they are mostly unaware of peak oil.
Big oil really isn't raising much of a huge fuss about the chance of new leases being opened up, but they certainly see an opportunity to get some cheap deals because it appears the democrats are going to open up larger leads in both the senate and the house. It's most certain they're going to have to pay more for leases and may not get those offshore deals beginning next year. Since Bush is still in office, it makes sense to them for a last-ditch push to get ANWR leases on the cheap.
But long term, isn't is assumed that peak oil will result in some pretty awful scorched-earth practices to get those last drops of oil anyway? Sure, every available piece of land will get drilled eventually regardless of environmental concerns because people will be in a whole lot of economic pain.
Actually capslock there needn't be a "scorched earth" practices. Currently the oil industry observes very strict environmental policies (enforced by the gov't, of course). Even onshore the industry is rather well behaved: I once watched a drilling crew walk over a lease picking up cigerret butts after drilling was completed. Not that they were that saintly but the landowner had a provision: $100/butt left on the ground. True story...honest. Getting oil out of the ground doesn't require environmental damage. And when those inevitable accidents do happen they cost the companies a lot of money. Drilling and production has never been a big polluter anyway. But those big tankers carrying oil have caused all the big pollution problems when the run into something.
Whether or not it is an election year, it seems like we need to evaluate the situation on its merits. I think we are very close to some serious financial problems. Once those occur, drilling for anyone is going to be very difficult. I don't see the scorched earth issue. What I see is the problem of trying to do all of this work, once globalization has fallen into disarray and outside financing is less available.
Gail, you are being too kind when you say "close" to serious financial problems. The whole nation is technically insolvent. WE are Argentina now. As I see it, debt as money is our fundamental problem. No nation has ever survived with this system. It has led to the ludicrous belief that it can be a "service/financial" economy and import everything it needs without its money becoming worthless.
A nation that makes nothing is worth nothing. Unless, that is, it becomes a thief like Rome and can defend its plunder.
As measured in near worthless US dollars, our so-called GDP is a fraud and an illusion. And like all magicians, their tricks are eventually found out. That is what is happening now. Soon we'll have a hard time buying a coconut with a dollar, yet alone oil. 100 years ago a dollar would buy you a new suit; today it will barely buy an apple. Tomorrow it will be a grape, and then a pea. What they'll do when the paper its printed on is worth more remains to be seen but I suspect it won't much matter as we'll be back to a barter system.
I am sure you have read my post Peak Oil and the Financial Markets: A Forecast for 2008. It isn't a whole lot cheerier than what you are saying. My recent talk The Expected Economic Impact of an Energy Downturn makes some of the same points.
I'd say drill it now, for environmental reasons!
For long I thought it'd be better to leave that oil in the ground forever. But the more I think of it, the more likely it seems it is eventually going to be drilled. So, do it while we're relatively well-off and can handle whatever environmental problems that drilling and extraction can cause. Oil drilling is a potentially very messy business, and if any major spill should occur, I'd think we would be more prone to clean it up now, than in a energy-scarce Mad Maxesque future (worst case..).
Not to be missed tonight at 7pm ET.
Larry Kudlow interviews GWB where they crow King Dollar and chant Drill Drill Drill together.
Apparently Bush is considering using his powers to remove the executive decision that placed a moratorium on the NO areas in the US for drilling.
Personally, this is fantastic news and I hope it occurs. We can all grow gray hairs and wrinkles waiting for the oil to come in. Hopefully, our kids and grandkids will use it wisely.
http://www.cnbc.com/id/15840232?video=781415075&play=1
Link is Larry Kudlow saying those things, reporting on what he and some other reporters heard while talking to Bush. Also, Bush is thinking about talking to the US people about the need to drill.
I've been lurking here for a very long time, at least in the context of The Oil Drum's lifespan, having become peak oil aware in 2001. Suffice to say I’ve worked in the halls of power in DC for both the energy industry and nonprofits. I’ve come to be pretty sensitive to how issues are framed, because framing steers and limit the scope of debate and thereby help determine outcomes. The framing of Gail’s post strikes at the heart of the purpose of The Oil Drum.
Gail's post raises questions about the core purpose for the Oil Drum's existence: is it to help our society change as a means of adapting to energy extraction dynamics or is it to merely a means to watch what many see as a predictable societal crash landing and a tool to help us minimize the pain of this crash landing ourselves, everybody else be damned? Certainly it can be both, but the latter, while perhaps serving as a dark amusement and personal utility to some, would seem to have limited merit. I use this site as part of my professional practice to help understand how as a society we might minimize suffering and act with understanding and compassion in matters regarding energy development and use. I know that many others have a similar motivation, even if they might describe it differently, and that there is a great and healthy diversity of ideas about how to make positive change. However, I do not presume that this desire for change is true for everybody, and I have a strong sense that some have a much more individualistic or selfish (depending on one’s values) motivation for reading The Oil Drum.
If the drilling moratoria are lifted across the board and API gets what it wants I don't see how this represents a change from current energy practice. Although the API's/Gail's arguments all sound reasonable, I worry when the outcome of an argument is the status quo, particularly when this serves the interests of those making the argument. And before y’all jump on me about targeting Gail, I don’t mean that she has any self-serving interest greater than most of the people on this list who would benefit from immediate oil extraction by having this oil provide a “cushion” for the rest of our lives. API, however, certainly does represent those with a personal financial interest. Further, I define the “status quo” as meaning the extraction of oil at rates determined by big oil (including both private and national companies) and "the free market" as this term is used by the wealthy and powerful. Yes, I understand that the drilling moratoria could be seen as the "status quo", but I see the true status quo as drilling for oil to satisfy current needs to avoid near-term pain regardless of long-term consequences and suffering.
It may be that extraction and oxidation of this oil is inevitable, but assuming for the purpose of argument that this is true, the fact of inevitability says nothing about when, where and why such extraction should happen. These are much more important questions than “to drill or not to drill.”
The framing of Gail's post with the subheadings, "Why We Should Start Now" versus "Objections", sets up a simplistic yes-or-no structure that does not reflect the broad array of positive responses to peaking oil (many of which have been discussed here) nor the possibility that the answer may not be quite so simple. The question about whether, where and when to drill for oil creates a very important opportunity for a public debate about peak oil and the responsible use of oil. API has framed the debate as one about whether the broad restrictions on drilling for oil should be lifted as a whole. To my knowledge, API has not proposed any prioritization or schedule for drilling other than "as fast as possible in the way that makes us as much money as possible.” API certainly has the resources to propose something other than “open the doors and trust us.” But, API really doesn’t want an informed and intelligent debate, so they frame the debate as a go/no-go situation and outside this forum and similar forums, in the realm of Fox News et al., API or its close allies use American fear about oil price and supply as the primary justification for drilling, knowing full well that it won’t make a bit of difference to either. My understanding is that the industry wants to be trusted to drill when, where and how they see fit, and this simplistic framing supports their agenda. Hopefully, the debate here and in other places will look more deeply into these issues.
I am also concerned by the nature of Gail’s "objections." While they are a wash list of the sorts of objections one would expect to see in a lobbyist’s "one-pager" in Washington, DC, I think this framing likewise tends to support a simplistic go/no-go approach to this problem. The debate is framed as a check list of arguments against the range of expected objections, rather than framing this discussion as one about how our country should plan for its energy future and when and where these resources might be used. Other comments have touched on this lack of consideration of alternatives to drilling and appropriate time and place if drilling is to be done.
Gail includes some very cursory discussion of the needs of our grandchildren, etc, but again, the question is not framed as, "how do we plan for our grandchildren (and great grandchildren's future?" Rather, it says that we can’t be sure that they could extract it so we should just use the oil now. This framing is classic industry framing that tends to direct debate away from how we should plan to use resources and toward a simple go/no-go decision that keeps the industry in the driver's seat. Should this happen then the status quo about who makes energy decisions certainly will not change, oil will be extracted to meet current needs, and nothing much will change.
Also, I think some of API's arguments are suspect. I’ve used Gail’s headings for these thoughts.
Argument: Necessary resources available - Better use of existing pipeline systems
The rusting oil pipeline and disappearing drilling capability arguments seem speculative and overly simplistic. While pipelines are aging (as are we all) and peak oil suggests that drilling equipment will begin to decrease in availability, the impact of decreasing and changing oil supplies on pipeline utilization and development and oil drilling is a very complex question. If overall oil consumption drops dramatically, then planned pipeline operations will get pitched out the window wholesale and we should expect to see a consolidation of pipeline interests and/or perhaps a more "public utility" approach to pipeline infrastructure. Much of this equipment is going to be changed anyway, the question is when and where. It may be that the best pipelines are maintained and that a new generation of pipelines is built (such as is currently happening with tar sands pipelines). Just assuming that resources won’t be available in the future seems a bit too convenient.
Likewise, the value of oil may very well become so high that there is no paucity of resource availability for drilling or adaptation of current pipeline infrastructure. Certainly, current high oil prices are resulting in an increase in the existence of drilling equipment and pipeline investments, not a decrease. Yes, there is peak everything, but oil is a fundamental resource such that we should expect that the resources needed for its extraction will be one of the last things to go.
Mostly the API's arguments seem to be fear of the future wrapped up in rationalization.
Gail says:
"If we delay for say, another 20 years, the production window might be 2038 to 2060. Who is to say what the world will look like then? If we don't start now, there is a good chance we may never be able to access oil in difficult locations."
Yes, who is to say? API/oil industry is not prescient and seem instead to have been doing a really bad job of planning for our long-term future, which is sort of one of the themes of The Oil Drum. Chances are that in 2038 there will still be people that will need energy. That it is easier for oil companies to imagine near-term oil pipeline utilization and drilling scenarios and easier to imagine the possibility of a lost opportunity does not logically mean that later-term scenarios are not viable or that API's fears of lost opportunity are reality. Moreover, not all of this oil is in "difficult to access" locations, which again begs the question about where and when. These time-related arguments seem to say that to save our society for future generations we must use resources now, because future generations are unlikely to be able to these resources anyway. I think this is a questionable and, from a generational perspective, self-serving assumption.
If people need and want oil, it would seem more likely they will find the resources in the future necessary to drill for and transport the oil, unless of course everything has collapsed, but such collapse is unlikely to be determined by our access to these relatively small amounts of oil, and if such collapse happens then I doubt that having this oil will make that much of a difference.
Argument: Better energy return on investment (EROI)
I can see an argument for a better return on financial investment, but I'm not sure that the energy return on investment will change that much. As Gail notes, these are small locations. That's not going to change. The EROI for the infrastructure at these locations will likely not change that much. That oil companies have higher fixed costs relative to their overall production would seem to be inevitable, but what is the relationship between higher fixed costs and EROI? Will the EROI be that much lower because we drill now as opposed to later? The wider pipeline issues are more complex. Yes, being able to use existing pipeline infrastructure until it utterly falls apart would provide for more efficient use of the resources that went into building these pipeline and might delay the construction of new pipelines, but the degree to which this is important depends on the operating life of the pipelines in the areas that the industry seeks to exploit and the suitability of these pipelines for use in lower-flow conditions. Consider the Alaska pipeline. At what point is a new pipeline necessary? Before or after all is drilled in Alaska? If a new pipeline is necessary before any major expansions in Alaska then the resources sunk into the existing pipeline will have no EROI benefit relative to future efforts. Likewise, construction of new smaller pipelines throughout the country might be inevitable given the age of the existing infrastructure. Describing these concerns as an EROI concern seems to mischaracterize the real issue, which is better return on financial investment -- and this is important, but it's not the same thing.
Argument: Help cushion the downslope
The question here is, help cushion it for whom when? After years of watching public policy debates from the inside, I am concerned when the result of an argument is that those making the argument are benefitted to the exclusion of others who are not in a position to protect their interests. Do we really need the cushion as the time that Gail says more than future generations? All I see in Gail’s arguments are the truisms that this oil won't postpone peak and that it will help cushion the blow for some. This begs the question about WHO should get the cushion and WHEN they should get it. I don't see any arguments that the "cushion" is best used for our current of soft butts (which is what API proposes) rather than future generations. This seems self-serving, on a generational basis.
Argument: Protect (very partially) against the loss of imports
I've thought for sometime that the oil security situation in the US should be framed by this question: If the US has only ~3% of the world's oil reserves, why is our goal to extract the rest as fast as possible? I posed this question to a friend's 8 year-old, and after a few seconds of thought he looked up with a worried face and said, "3% -- that's not very much." He’s right. So I ask, why is API proposing to pump this oil out of the ground as fast as possible? If API has a proposal for limiting the rate of extraction of oil that is not based on the industry’s capacity to do so, I’d be interested in hearing such a proposal.
As for the thought that we should drill now and save some vast quantity of oil in some unknown reserves for future generations, I think this is utterly self-serving and fanciful.
Is our desire to extract this oil really based on thoughtful consideration of the future, or is it really just self-serving rationalization to satisfy our own needs to the detriment of those who will come after us? I remember Policy Pete bemoaning the demise of the big oil companies in the US, how they had become a shadow of themselves in terms of activities and resources in the US. Certainly those who work in the oil patch have self-interests for keeping the gravy train running as long as possible during their lifetimes. To a degree the oil industry’s interests coincide with the country’s interests, but only to a degree, and often they don’t.
I think the arguments here are crystallized in the final statement about James Hansen, where Gail says he said that this oil is going to be drilled anyway and it won't make that much difference to global warming. This same statement could be said about each of the remaining unexploited fossil fuel reserves in the Earth, as individual reserves. Moreover, it is also nearly a truism that all reserves will be drilled or dug at some point. Will the exploitation of a single coal mine change the course of global warming? Will turning off a light make a difference to future generations? Persevering any single resource or any small set of resources will not impact global warming, nor will it change our energy future. But, I believe that we should continue to take action that helps to reduce future suffering, and this may mean whipping up compassion for our kids and the less fortunate and saving something for them, rather than just believing our gross consumptive habits as inevitable. Otherwise, the Oil Drum really does become something of a gossip’s window on a neighbor’s tragedy.
How industry PR frames debates often says more about what’s going on then the words they say. API has framed its arguments so as to focus on bits of policy leading to a simplistic “to drill or not to drill” decision, rather than on the more important conversation about how we plan for our nation’s energy future, specifically whether, when and where to drill. We can prioritize, we can plan, we can decide not to give our needs the benefit of the doubt. The API's framing plays to this generation’s self-interests and focuses the conversation away from thoughtful policies for the benefit of future generations, because such policies might restrict the petroleum industry’s and its investor's financial interests.
The WWII generation has come to be known as “The Greatest Generation.” What will the boomers be called? How would you feel about, “The Luckiest Generation” or “The Most Selfish Generation”? How our current resource questions are resolved may very well answer this question.
Excellent comment. It is a compelling argument that we need that oil to help us limp over to a more sustainable path, but I have no hope of such use having the intended effect. Instead: BAU.
Thanks for your comments. I think you are probably attributing too much to API and too little to me.
I also think you missed my very real concern for our financial future, and what impact that that is going to have on drilling. I have written several financial articles. The most recent is
The Expected Economic Impact of an Energy Downturn
The one that preceded that article was
Peak Oil and the Financial Markets: A Forecast for 2008
Gail, those previous works do not change anything in the above, do they? Essentially, you're advocating pseudo-BAU. I think the point some of us are trying to make is no version of BAU will work or is justified. I say, do not pass Go, do not collect $200, go directly to the new paradigm.
Cheers
That'd be the one where we all die off until there are only 50 million people left on earth, then we start over from the stone age? That new paradigm?
Pardon me, but that is the eventuality that most of us would like to avoid if possible. Avoiding the annihilation of everything that mankind has ever produced does depend on some minimal BAU continuing to exist for the next... ever.
Bitchy isn't really necessary is it? Don't put words in my mouth, friend, and I'll be sure to return the favor.
As has been shown, one can grow MORE food, for example, using sustainable methods than with "modern" practices.
Etc.
Perhaps what BAU means to you is different than what it means to me, or you are just being obtuse intentionally. BAU, so we are clear, means anything that indludes a continuation of capitalism as currently practiced, a lack of community, rule by the pwerful and wealthy, fractional banking, etc.
Now, does any of that mean we should raze the planet and start over? No.
In the future, if you can't do better than the utter crap you posted above, please refrain from responding at all.
Cheers
FFs. Yes, amish farming can produce more food per acre IF and only IF you have chemical fertillizer, so long as you are willing to spend 12 times the man-hours to do it. It should be painfully obvious that that isn't a working plan.
BAU means to me that there continues to BE an economy worth the name, it means you have financial implements like money, basic travel methodologies, basic governance, communications, food, medicine, etcetera. That DOES involve having corporations, capitalists, rich people and many other things that your ideology seems to dislike. Fractional banking is negotiable, but it is going to *hurt* to lose it unless it can be disposed of over a few centuries.
To change the bedrock concepts like you are talking about involves going brave new world and isn't at all likely to happen. The options are NOT some delightful altruistic utopia or a continuation of the way things have been, the options are a desperate attempt to hold on to any scraps of civilization we can or total and complete annihilation back to the freaking stone age. Your ideology is killing people. Today. In greater numbers than you can imagine. Every day that we delay action kills more.
The institutions of civilization, that you so glibly describe as BAU are what has evolved over centuries because they are what WORKS! Command economies, barter systems, etcetera, DON'T!
The Amish? Who the hell mentioned the Amish? Try permaculture, intensive bioculture, Fukuoka method... You don't seem to have done any rsearch on these, or you would not have mentioned the Amish. That is, you are talking out your rear. That is, you are just being argumentative. I have no idea what hair got up your arse, but you really need to remove it.
Yup, that's BAU. I am not hostile to your way of thinking, why are you so frightened of mine that it causes you to attack immediately and dispense with any pretension at discourse?
I am on record, Sir Hair Up The Arse, as advocating localized living being the primary structure of society. Also, that that be in harmony with nature. We will not, repeat, NOT survive as a society - and possibly not as a species - otherwise. If we cannot find a way to live sustainably on this planet, we will cease to exist or will end up living TO surive. The planetary system is stressed and is reacting. BAU will not work. 350. Learn it, love it, live it.
Pray tell, why do we need corporations? What inherent value do they provide? None. Without corporation, one could easily argue, we would not be in the mess we are in now because society would have "advanced" at a far slower pace. We would likely be decades, if not centuries, from having to figure out these problems. Further, had we used FF a bit more wisely and slowed down when warned in the 1950's, perhaps we would have understood their utitlity better. Rickover sure as shit did. You can't argue in favor of corporations without enything you say be counterbalanced - at least that - by the damage they do. Americans generally have two-job families and have no choice in the matter. Quality of life is DOWN over this last many decades, not up. But then, I don't measure my life in stuff and profit, as you seem to be doing.
Fractional banking is NOT negotiable. Usury was illegal and considered a vice for most of human history, was it not? What makes it suddenly good? Nothing. It is THE creator of debt. Debt is slavery, pure and simple. But, it is slavery within an illusion of freedom. (See two-job families and lowering buying power/quality of life.)
By what measure? Their period of development is germane? How? Slavery evolved over millenia... must be the best thing going! Forman argument, man. You're making yourself look like a nut.
There is only one institution of civilization that matters over the long stretch of history, and it is community. Those civilizations that have it, are known to be healthier and happier. This is something you cannot dispute, yet you utter this claptrap about current civilization?
Let's get back to what works. How does current civilization "work?" Because you have "stuff?" Sorry, no. Are there benefits to what has occurred over the last few hundred years? Of course. But how does that equate to the end of the line? The best we can do? If BAU is the be ll and end all, then (pay attention here...) why the frick is it collapsing around your deaf ears?
And that's not even getting into the environmental slow suicide we are already watching happen. BAU has put us on a cours that will likely include our destruction as a species if we don't reverse it soon. That's success to you?
Support that. It's BS.
You are wedded to BAU. I don't know why. But BAU is falling apart in front of you. As it continues you are going to suffer some very serious cognitive dissonance. This is evidenced by your overly emotional initial attack.
Don't claim you weren't warned.
Cheers
All of those farming methods you mentioned are amish methods with different window-dressing. They are ALL minimal subsistence-level pure agrarian systems that involve 100% of the population living on 5+ acres each and farming exclusively. They also will as I said, support at best 1.5 billion people permanently assuming the transition is graceful while allowing no one to pay any form of taxes whatsoever. Society as a whole would do better going back to amish than fiddling around with hippie crap like that.
To say either that you are not hostile to my "way of thinking" or that I "fear" yours is clearly bogus. Every sentence you write openly displays your hatred of every institution that has allowed you to live as long as you have. I dislike yours because it is murdering people. Right now. today. This second. Your opposition to essential measures is resulting in greater death before the rebound. What is there in that to like?
Command economies have consistently failed. Every time they have been tried. The law of unintended consequences virtually guarantees that that will always be the case. History has exactly 0 examples of successful command economies it has mony many examples of formerly command economies learning the error of their ways and prospering, and it has many examples of relatively free markets switching to command and crashing.
The fact that you are deluded about the murder you are committing is just a sad display of your lack of comprehension.
As regards the Amish, I have not researched their farming methods, but if they resemble anything like permaculture or Fukuoka, I'll eat my hat. Perhaps you are simplistically equating "natural" and organic mean anything someone cares to do that isn't BAU? Even permaculture and Fukuoka are very, very different. You do not appear to know what you are talking about.
This is, in fact, proven by the numbers you toss out. One link I gave you, which you obviously did not read, gave a density of 350 fed on 2 acres. That is far, far higher than agribusinesses achieves. So where do you get your bullshit 5 acres per person? Hell, the WORST natural farmer on the planet would do better than that. Essentially, you are lying. Why, I don't know, but I do find it to be common among those wedded to ideologies.
Graceful transition? Seriously, are you a pathological mis-representer/liar? and, how many assumptions are you going to make in one sub-thread? Christ, I think you're beyond an idealogue... you seem to be edging on zealotry. Before I was wishing for the death of the world and now I'm dreaming of smooth transitions?
AH! There it is! Hippie crap! Yup! run around in my beads and Birkenstocks smoking pot and singing Kumbayah! I wish you'd saved me the trouble and said that first off. I wouldn't have wasted my time with you.
Hatred? Tsk, tsk... we are getting heavily into the hyperbole (lies) are we not? Institutions are merely people done in stone and steel and wrapped in ideas. Often, they are bad ideas. Marriage. Not bad. The Fed? A criminal organization. Is that hate? Hmmm... I don't know... I'm confused by the venom you are spewing... I thought I knew what hate is, but since I HATE and you DON'T, I'm confused now.
So, let me see.... I'm killing people. Right now. Today. How is that, exactly? I'm advocating living within nature... yup... that kills lots! I'm advocating sustainability... yup, that kills lots! I'm advocating keeping science and knowledge alive, in part by keeping the internet alive.... yup, THAT'S gonna kill heaps!! I envision campuses where those so inclined work at the highest scientific endeavors... and that the implementation of any new developments be done only after their full effects are known and ONLY where they don't interfere with sustainability.
Now, what essential measures do I oppose? ANWR? If you think ANWR is an essential measure when the greatest effect it would ever have on prices has been analyzed to be, oh... pennies, then you're a damned fool. Or invested in oil. Essential is cutting consumption NOW. (That ought to kill a few more!) Essential is our food supply weaned off of fossil fuels. Essential is creating smaller, more responsive, more fair, more equal communities. (Bunch more just bit the dust!)
You are a misguided, mean, idealogue.
Cheers
You support nothing. I repeat, you support nothing. You only oppose.
The measures and institutions you advocate do not work. They have never worked, they may never work. You might as well "advocate" having aliens come down and deliver us from evil, that would be as solidly correlated with reality as what you are talking about.
There is not 1 permaculture plantation that produces a meaningful quantity of food anywhere in the world. Your hand-waving about "350 people per acre" is therefore just that.
I have a very simple test that I perform before I commit to opposing or supporting something. Has it been *shown* to work. In the case of amish farming, the answer is yes. In the case of permaculture, and all the other crap you keep babbling about, the answer is NO. Does that mean that they never will, NO, they MAY become something at some point, but today they are nothing.
So, yes, you are killing people. You oppose nuclear power, that opposition has already killed 1 billion people and kills an additional 100 million every year we don't start. You oppose drilling anwr, that opposition kills 10 million people every year we do not start. You oppose CTL, that opposition kills 1 million people every time we don't start.
And on your side of the ledger you have.... nothing. You don't have a single proven viable method of producing anything at all that you support. This isn't ideology, it's engineering. Your ideology is making engineering solutions that allow a continuation of the human race impossible.
As for your insults as-to my character/the strength of my arguments, I can only say that my respect for your intellectual prowess is virtually non-existent, so I really don't care what you think. It is painfully obvious that you have never tried to implement any of the things you "advocate".
I give up. You're an argumentative ass and a bit of an idiot. Your statement above is based solely on my disagreeing with you. It is blatantly, patently false, as reading any of a number of my posts over the time I've been here at TOD shows. Your emotionality brands you, friend. I repeat: zealot.
Well, since you SAY so! Frick...
First, when did I advocate only permaculture? Second, nice twist, but I call bull despite your redefining the term. To wit: There is not now and likely will never be a permaculture "plantation." the very definition of the term precludes this, you lunkhead! You are not an honest person, it seems.
There are myriad successful homes/farms where permaculture is practiced. Again, a false, and, frankly, idiotic statement to make given how easily dis-proven it is. Reign in your zealotry so you can THINK.
A congressman making a go of organic! http://www.commondreams.org/news2006/1110-03.htm
And some brothers... for the last 25 years... http://globalpublicmedia.com/peak_moment_bullock_brothers_homestead_a_25...
But I'm sure your right that it's all just impossible! Hell, it don't even exist!
http://www.commondreams.org/news2006/1110-03.htm
Really? News to me! (And everyone else here.)
A DARE you to back that up. You are absolutely full of crap.
Friend, you've got serious issues with your love of BAU. It's going bye-bye. Suggest you start getting over it now.
Here is an assessment of no-till agriculture:
http://www.sciam.com/article.cfm?id=no-till
In some environments it gives advantages, being particularly effective in minimising erosion, however, it is not without issues:
Whilst initiatives such as no-till and permaculture should be encouraged and have potential, it is at best premature to be confident that they can provide for 6.5 billion of us, particularly in an environment where the use of mechanical equipment is more difficult due to oil shortage.
Dave, if you find anything that is not without "issues" in this world, do let me know. The problem lies here: "...because farmers there often use the crop residues for fuel, animal feed and other purposes." Well, yup... could be a problem if you aren't actually doing no-till agriculture as intended. Does that mean it can't be done there, or does it mean patience is needed to build up the soils, and perhaps other interventions and support till then? We aren't assuming soils around world are ready. This is why we call periods such as this transitions.
One reason we need to come to some degree of consensus - or just leave behind those who will not see - is time. If we can put significant work into building up soils before they are needed to avoid starvation, that would be a good idea, no?
We all know nothing is perfect. I don't recall stating there was one answer for everyone. Need the Masai, for example, completely abandon their lifestyle? I'm not sure they would, left to their own devices. (Of course, in terms of millenia, even under the best of circumstances weather and climate shift, so...)
Cheers
What I am a bit wary about is the extent that either of us can assess how to produce food effectively.
Books are fine, but have limits in agriculture, especially since soils and climate can vary so much.
I certainly don't want to get involved in some discussion on some of the terms above, and have no doubt that the things you advocate you do because of a genuine desire to see a good outcome for as many people as possible, but the consensus you suggest simply does not exist, for instance many of us feel that it is a good idea to proceed with the drilling you reject.
As for leaving behind those who will not see, it seems to me most likely that the ones who will be left behind as shortages bite would be those who lean to some of the arguments you make, which would be a shame as I would fully support many of the things you say about trying to increase soil fertility etc., so any marginalisation of those who are most interested in this sort of subject would be regrettable.
Incidentally, knowing your interest in micro-generation you may be interested in this assessment for the UK:
http://www.berr.gov.uk/energy/sources/sustainable/microgeneration/resear...
The potential should be considerably greater in the US - it does tend to be pricey though.
Hope you find the link valuable,
Rgds,
All well and good. As we have previously discussed with energy, there will not be one answer. There are still quite varied climates out there. When I advocate for natural systems it is simply an acknowledgment of where we must be eventually anyway in order to be able to feed whatever civilization follows this. Moving toward sustainability is unavoidable. We can argue the time frames till the cows come home, but in the end it is where we must head. Thus, why wait? In a very short period of time a great number of people will be not getting fed for purely economic reasons. This is not necessary, but it will happen because, well, people often suck and don't like to share. So, moving as quickly as possible to sustainable methods is the best answer. Coordinating the transition will be impossible, but we do need to try.
I don't recall discussing consensus. I am not surprised many think wasting resources on more of what got us here is a good idea. I even understand why they think so. Why they don't see spending that money and those resources on windmills, solar installations, tidal generators, reclaiming/rebuilding soil are not BETTER uses is a bit of a mystery even with all the posts on the subject.
I don't know... I don't tend to be wrong about what the future holds, but it does happen. Perhaps you'll be proven right. Don't hold your breath.
I fail to see how growing your own food is going to leave one marginalized, particularly when you can do that AND work a full time job.
As for the link, thank you much. It's a great resource. Ironically, it's a perfect example of BAU, not what I advocate. Microgeneration done the BAU way is almost guaranteed to fail. A profit demand has a way of making the simple too expensive. I'd like to see this analysis done with the tinkerers carrying the day, instead of Big Business. I'd also like to see the analysis done in that way plus it being a program subsidized as a national/global emergency, a la the proposed new manhattan project for energy.
Cheers
Welcome, and thanks for the point-by-point. You are thinking that the coastal areas are oil reserves set aside for the future as a reserve while really this is more about environmental protection. http://www.alaskaoceans.net/sao/Alaska06.pps#268,9,Presidential
It is unlikely that drilling technology will ever be good enough to risk our coasts, but the case that needs to be made is that no spills can happen, despite TODs preocupation with energy.
In terms of what James Hansen has been saying, Gail has got it wrong. We are already past a safe concentration of CO2 in the atmosphere and we need to clean up everything we put in from now on and then some. http://www.columbia.edu/~jeh1/2008/TargetCO2_20080407.pdf
Thus, only the very easiest oil can really be justified since there is an energy cost in cleaning up the emissions from its use. Difficult oil may ultimately yield no net energy when the cleanup cost is counted. Coal stands a better chance since in is easier to capture the emissions compared with oil owing to coal's centralized use.
While I like your idea of weighing the interests of the future in using the resource against our present interest, this is not really the reason the drilling ban exists and one needs to go back to the National Academies of Science to see if technological improvements have changed the situation. I would say that given the issues with global warming, even perfect drilling methods would not justify extracting the oil.
Gail's question of sooner or later is not really important. The question is really does drilling ever make sense. The answer is becoming more and more strongly no. The framing that is most striking here is the asumption that the oil will be used sometime. In fact, it may be left where it is and that is the main meaning of the moratorium. The question is not when we should drill but if we should drill.
Chris
Hi HighTension,
I thank you for your detailed reply to some of the "objections" in Gail's article. Good points, especially important is that "limited new supply" is never going to solve the peak oil problem. We already know that if world supply increased by 100% demand would quickly catch-up.
Conservation in all its forms( less driving, more fuel efficient cars, alternative fuels, PHEV etc) is the only solution.
The final point is that if off-shore drilling had continued in 1982, most would be gone and US would still be in same situation.