The Oil Drum

On 5th December 2007 Fatih Birol, Chief Economist and Head of the Economic Analysis Division of the International Energy Agency (IEA) gave a presentation in London at the Shell Centre, hosted by the British Institute of Energy Economics (BIEE). Mike Pepler attended the meeting and took the following notes (his personal comments are in italics):

Introduction

·         We are on the eve of a new world energy order.

·         On the supply side, we have oil production outside the core OPEC countries reaching a peak, which is not good news for the International Oil Companies (IOCs). The National Oil Companies (NOCs) will determine future oil supply.

·         On the demand side, China and India are transforming global energy markets through their sheer size and rate of economic growth.

·         Between now and 2030, China and India will account for 70% of new global oil demand, and 80% of new coal demand.

This article was originally written for The Hybrid Debate.

The hybrid car may be a milestone in the history of personal transportation, but it still burns petrol and releases CO2. In this sense, it’s no different from the Model-T Ford of 1908. True, the technology provides significant efficiency benefits. But it won’t be revolutionary until its next incarnation, the "plug-in hybrid electric vehicle" (PHEV), goes mainstream.

In a PHEV, the internal combustion engine (ICE) is further reduced in size; the electric motor and battery pack are scaled up; and a cable is provided, to connect the car to the national grid via wall sockets. With heavy-duty electrical components taking more of the strain, the ICE runs for shorter periods of time, thus improving the car’s efficiency.

The key objective in the face of climate change is to reduce the atmospheric concentration of carbon dioxide from the combustion of fossil fuel. Certainly there are other aspects, it would be useful not to cut down forests for example and there are other greenhouse gasses but as this is The Oil Drum we’ll focus on fossil fuels and CO2.

The entire debate when it comes to fossil fuels and climate change is focused on demand, the consumption of fossil fuels and the resultant emissions. This is not the only approach. Here I propose an alternative approach that totally ignores emissions but instead focuses on the extraction of fossil fuels from the ground.

I originally wrote this article for The Hybrid Debate.

The Hybrid Debate encourages people to consider how their choice of car affects the world we live in and imagine how mass acceptance of hybrid technology could influence other aspects of our lives.

The aim is to encourage informed analysis and public debate amongst advocates and sceptics of the new technology.

Writers and experts in areas ranging from urban planning to the economy have been asked to kick start the debate by imagining a hybrid future and the implications in their area of expertise.

www.thehybriddebate.com

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The future may be bright for hybrids, but it would have to be a very distant future, judging by the evolution of the car to date, and by the deeply ingrained tendencies of British drivers.

This is an update to an article of mine that was originally published in The Age back in March this year.

On the 15th March, the Esso/BHP Billiton Bass Strait joint venture asked the Minister for Planning whether a new gas conditioning plant at Longford requires an Environmental Effects Statement. The State Government's new guidelines for assessing projects with significant carbon dioxide (CO2) emissions were about to get their first big test.

The gas conditioning plant is required to treat new production from the Kipper gas field. The downside is that it would emit a million tonnes of CO2 every year. While not quite in the same league as a coal-fired power station, this is not the right approach to achieving urgent CO2 reductions.

Capturing carbon dioxide from coal (and gas) fired electricity plants. Subsequently transporting the carbon dioxide from the plant and storing it underground in (abandoned) oil/gas fields, in other geological formations or on the ocean floor. It seems like an excellent solution for continued fossil fuel use in the coming decades.

The European Union wants to have 12 large CO2 capture and storage demonstration projects in place by 2015, requiring an investment of 5 billion euro. The expectation is that this development will lead to significant cost reductions, making the technology affordable by 2020. There are however two large drawbacks, it will keep costing large sums of money and the process is quite energy intensive. In this post the economic viability of the process is scrutinized. In a previous post the impact of the extra energy cost of the process on coal depletion was quantified.

Capturing carbon dioxide from coal (and gas) fired electricity plants. Subsequently transporting the carbon dioxide from the plant and storing it underground in (abandoned) oil/gas fields, in other geological formations or on the ocean floor. It seems like an excellent solution for continued fossil fuel use in the coming decades.

The European Union wants to have 12 large CO2 capture and storage demonstration projects in place by 2015, requiring an investment of 5 billion euro. The expectation is that this development will cause significant cost reductions, making the technology affordable by 2020. There are however two large drawbacks, it will keep costing large sums of money and the process is quite energy intensive. In this post the impact of the extra energy cost of the process on coal depletion is quantified, the economics will follow in a later article.

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The title is that of a paper recently (20th April 2007) submitted by James Hansen and Pushker Kharecha. The complete paper can be downloaded here:

Implications of “Peak Oil” for Atmospheric CO₂ and Climate

James Hansen is a physicist, adjunct professor: Earth and Environmental Sciences, Columbia University and director: NASA's Goddard Institute for Space Science. Outside the scientific community Hansen is probably best known for accusing the Bush administration of trying to silence him after he gave a lecture in December 2005 calling for prompt reductions in emissions of greenhouse gases linked to global warming.

In this paper Hansen and Kharecha consider “realistic” (they use EIA data) reserves for oil and gas and conclude that due to approaching peaks it is feasible to keep atmospheric CO₂ from exceeding approximately 450ppm as long as coal and unconventional fossil fuels are used responsibly.

These “two riders of the apocalypse” as Jonathon Porritt, chair of the UK’s Sustainable Development Commission, described them [The Oil Drum] last year are heading our way. Porritt is one of a small group of people specifically talking and writing about the relationship between these two subjects, which at first glance can appear mutually exclusive.

Other key contributors to this discussion include Jeremy Leggett who brought the subjects together in his book: Half Gone: Oil, Gas, Hot Air and the Global Energy Crisis [Amazon.co.uk] and more recently Richard Heinberg who wrote an essay titled Bridging Peak Oil and Climate Change Activism [EnergyBulletin.net]. Below the fold, my thoughts:

EU outlines new carbon permits

The European Union has established carbon limits for the second phase of the carbon trading scheme, a key step in cutting greenhouse gas emissions. The European Trading Scheme (ETS) aims to cut emissions by 8% of 1990 levels. Critics say that nations involved in the scheme had set their carbon allowance levels too high, and have not been aggressive enough in cuts. The EU set allowances for the 2008-2012 period to an average of 7% below the levels proposed by member states.

Europeans face fuel 'price surge'

Electricity prices could double in Europe if power firms are to meet emissions reduction targets under the Kyoto protocol, says a report. Carbon prices are set to surge, and firms might pass this rise on to the wholesale market, says a report by consultancy Global Energy Decision.