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Peak Oil Postponed?

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Seminar at the think tank Global Challenge in Stockholm Sweden

Global Challenge: Recently, new data on available oil reserves, new deep-water deposits, oil sands and especially “shale gas” has given rise to concerns about what these resources mean from a climate perspective. The seminar “Peak Oil Postponed?” Aims to analyze the importance of these tasks.
Charles AS Hall, a professor at SUNY College of Environmental Science and Forestry, and one of the authors of the book Energy and the Wealth of Nations. Hall has coined the term Eroi, “energy return on investment” and highlights this concept the significance of the various assets, net energy.
Participating is one of the most renowned in the field, Professor Kjell Aleklett of Uppsala University and chairman and co-founder of ASPO. Aleklett published earlier this year, a summary of ten years of controversial research about “peak oil” theory in the book “Peeking at Peak Oil.”

Presenters and discussion leaders: Eva Alfredsson and Anders Wijkman, the new Co-President of the Club of Rome.

Part 1: Peak Oil Postponed? – Kjell Aleklett

Part 2: Peak Oil Postponed? – Charles AS Hall

Part 3: Peak Oil Postponed? – Q&A

The Swedish morning newspaper Svenska Dagbladet published an article by Charles AS Hall the same day as the seminar took place. It is a translation of this article by Michael Lardelli.

(The article in Swedish)

Expensive oil is the cause of lower growth

The problem is not that oil is running out. The problem is what happens when oil production can no longer meet the world’s and national economies’ increasing needs. So writes the US Professor Charles A.S. Hall who visits Sweden today.

If and when oil production begins to decline this will probably mean the greatest crisis that western civilization has ever faced.

Charles A.S Hall

It is clear that the majority of the world’s economies are no longer growing – either they are not growing at all, or they are not growing as they “should” and once did. Most are keen to blame this on politicians or erroneous monetary or financial policy. Fewer understand that we live in an increasingly resource-limited world. The world’s most valuable raw materials – oil, gas, wood, groundwater, fish, etc. – are gone, severely reduced or seriously polluted.

Let’s look at our most valuable fuel, petroleum (i.e. oil and natural gas). We live in an “oil age” to a significantly greater extent than we live in an information age or a postindustrial age.

Look around you. Nearly everything that we do in our society is determined by petroleum use. It provides us with food, transport, employment, education, media, comfort, chemicals, fertilizers, and medicines. The proportion of our energy use provided by petroleum has hardly changed in more than half a century. Solar energy represents less than one percent and is only marginally increasing its share of total energy use. Some gains in efficiency of energy use have occurred, but our economies continue to use the same amounts of oil, gas, and coal every year.

Previously, oil use increased steadily by two to three percent per year, but this has recently hovered around zero – in nearly perfect synchrony with our declining economic growth.

The problem is not that oil is running out rather than what happens when oil production can no longer meet the world’s and national economies’ increasing needs. Population growth and increased domestic use of petroleum by the oil exporting nations worsens the situation. “Peak oil” means that moment in time when the rate of oil production can no longer be increased. “Peak oil” is not a theoretical concept. Rather, it is a very real occurrence that happened in the USA in 1970 and has occurred in approximately 60 of the world’s 80 oil producing nations.

The question is when peak oil will occur around the world as a whole? Comprehensive data analysis shows that it has already occurred or soon will.

At the same time, the cost of producing every new barrel is rising. To a large degree, this is because EROI – “Energy Return on Energy Invested” – or the energy profit per unit of energy invested is declining for oil (and for most other fuels). This declining energy profitability means that resource depletion is overwhelming any technical advances in energy production or use.

Currently, approximately one coffee cup of oil (or any other fuel) is burned for every dollar we spend. To our best knowledge, there are no substitutes for oil and gas regarding quality and scale. None at all. As every beer drinker knows a glass begins full and finishes empty. The faster one drinks, the quicker the beer runs out, and eventually, the bar closes. Economic growth is accelerating the emptying of the world’s oil reserves.

There are still enormous quantities of oil remaining underground, maybe five times more than we have produced so far. The problem is that most of this remaining oil is a low quality which means that the energy profitability of its production is low and will decline until eventually one barrel of oil will be required to mine one barrel of oil. Rising prices will not solve this problem.

If and when the global peak of oil production occurs, and production begins to decline western civilization will probably face its greatest ever crisis. It will fundamentally change our economies and our lives. And yet no politicians (and only very few scientists) have this issue on their radar screens. There are many ways we can adapt to this new reality but not if we choose to ignore it.

Professor at SUNY College of Environmental Science and Forestry and author of the book Energy and the Wealth of Nations

Kjell Aleklett is Professor of Physics at Uppsala University in Sweden where he leads the Uppsala Global Energy Systems Group (UGES).

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