In February ASPO received interesting information
from Dr. Robert L. Hirsch
to be published in our newsletter. Dr Hirsch and his colleagues have
just completed a study for the U.S. DOE on the mitigation of world oil peaking,
Hirsch, R.L., Bezdek, R.H, Wendling, R.M. Peaking of World Oil Production:
Impacts, Mitigation and Risk Management. The summery of this paper, as reporter
by Dr. Hirsch, is presented below.
The date for Peak-Oil is discussed without focus on the date itself:
“ Optimistic oil production forecasts deserve to be viewed with considerable
skepticism”, but the impact of Peak-Oil is described without doubts:
“ World oil peaking represents a problem like none other. The political,
economic, and social stakes are enormous. ”
The way US DOE has acted so far it is obvious that we cannot expect action
before the Peak-Oil date. According to the study this will have the following
impact: “Waiting until world conventional oil production peaks before initiating
crash program mitigation leaves the world with a significant liquid fuel
deficit for two decades or longer.”
ASPO has now for four years tried to raise awareness of the serious consequences
that Peak-Oil has for Mankind. This report can help you understand the problems.
Kjell Aleklett,
president of ASPO
The Mitigation of the Peaking of World
Oil Production
Summary of an Analysis, February 8, 2005
Dr. Robert L. Hirsch
A recently completed study for the U.S. Department of Energy analyzed viable
technologies to mitigate oil shortages associated with the upcoming peaking
of world oil production. Commercial or near-commercial options
include improved vehicle fuel efficiency, enhanced conventional oil recovery,
and the production of substitute fuels. While research and development
on other options could be important, their commercial success is by no means
assured, and none offer near-term solutions.
Improved fuel efficiency in the world’s transportation sector will be a
critical element in the long-term reduction of liquid fuel consumption, however,
the scale of effort required will inherently take time and be very expensive.
For example, the U.S. has a fleet of over 200 million automobiles, vans, pick-ups,
and SUVs. Replacement of just half with higher efficiency models will require
at least 15 years at a cost of over two trillion dollars for the U.S. alone.
Similar conclusions generally apply worldwide.
Commercial and near-commercial options for mitigating the decline of conventional
oil production include:
1) Enhanced Oil Recovery (EOR), which can help moderate oil production declines
from older conventional oil fields;
2) Heavy oil/oil sands, a large resource of lower grade oils, now produced
primarily in Canada and Venezuela;
3) Coal liquefaction, an established technique for producing clean substitute
fuels from the world’s abundant coal reserves; and
4) Clean substitute fuels produced from remote natural gas.
For the foreseeable future, electricity-producing technologies, e.g., nuclear
and solar energy, cannot substitute for liquid fuels in most transportation
applications. Someday, electric cars may be practical, but decades will
be required before they achieve significant market penetration and impact
world oil consumption. And no one has yet defined viable options for
powering heavy trucks or airplanes with electricity.
To explore how these technologies might contribute, three alternative mitigation
scenarios were analyzed: One where action is initiated when peaking
occurs, a second where action is assumed to start 10 years before peaking,
and a third where action is assumed to start 20 years before peaking.
Estimates of the possible contributions of each mitigation option were developed,
based on crash program implementation. Crash programs represent the fastest
possible implementation – the best case. In practical terms, real-world
action is certain to be slower.
Analysis of the simultaneous implementation of all of the options showed
that an impact of roughly 25 million barrels per day might be possible 15
years after initiation. Because conventional oil production decline will start
at the time of peaking, crash program mitigation inherently cannot avert
massive shortages unless it is initiated well in advance of peaking.
Specifically,
· Waiting until world conventional oil production
peaks before initiating crash program mitigation leaves the world with a significant
liquid fuel deficit for two decades or longer.
· Initiating a crash program 10 years before world
oil peaking would help considerably but would still result in a worldwide
liquid fuels shortfall, starting roughly a decade after the time that oil
would have otherwise peaked.
· Initiating crash program mitigation 20 years
before peaking offers the possibility of avoiding a world liquid fuels shortfall
for the forecast period.
Without timely mitigation, world supply/demand balance will be achieved
through massive demand destruction (shortages), accompanied by huge oil price
increases, both of which would create a long period of significant economic
hardship worldwide.
Other important observations revealed by the analysis included the following:
1. The date of world oil peaking is not known with certainty,
complicating the decision-making process. A fundamental problem in predicting
oil peaking is uncertain and politically biased oil reserves claims from
many oil producing countries.
2. As recently as 2001, authoritative forecasts of abundant future
supplies of North American natural gas proved to be excessively optimistic
as evidenced by the recent tripling of natural gas prices. Oil and natural
gas geology is similar in many ways, suggesting that optimistic oil production
forecasts deserve to be viewed with considerable skepticism.
3. In the developed nations, the economic problems associated with
world oil peaking and the resultant oil shortages will be extremely
serious. In the developing nations, economic problems will be much worse.
4. While greater end-use efficiency is essential in the long term,
increased efficiency alone will be neither sufficient nor timely enough to
solve the oil shortage problem in the short term. To preserve reasonable
levels of economic prosperity and growth, production of large amounts of substitute
liquid fuels will be required. While a number of substitute fuel production
technologies are currently available for deployment, the massive construction
effort required will be extremely expensive and very time-consuming, even
on a crash program basis.
5. Government intervention will be essential, because the economic
and social impacts of oil peaking will otherwise be chaotic, and crash program
mitigation will need to be properly supported. How and when governments begin
to seriously address these challenges is yet to be determined.
Oil peaking discussions should focus primarily on prudent risk management,
and secondarily on forecasting the timing of oil peaking, which will always
be inexact. Mitigation initiated earlier than required might turn
out to be premature, if peaking is slow in coming. If peaking is imminent,
failure to act aggressively will be extremely damaging worldwide.
World oil peaking represents a problem like none other.
The political, economic, and social stakes are enormous. Prudent risk
management demands urgent attention and early action.
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