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Joe Romm on "Peak Oil" and Future Solutions

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  • Felix Kramer
    We ll have postings on the Air Resources Board hearing and the Aspen Environmental Forum in a few days. Meanwhile, here s a very thoughtful and important
    Message 1 of 1 , Mar 29, 2008
      We'll have postings on the Air Resources Board hearing and the Aspen
      Environmental Forum in a few days. Meanwhile, here's a very
      thoughtful and important article.

      We've often cautioned people not to imagine that everything changes
      the day experts conclude we've reached oil production peaks. The
      world will always have oil -- at some price, and with increasing
      amounts of CO2 and other collateral devastation from extracting and
      processing it. Now Joe Romm addresses the issue effectively and
      points to policies and solutions for the next President. Here, from
      his Climate Progresss blog, is his summary/short version (see also
      posted comments there), and the full text from the version that
      appears in Salon.

      Peak Oil? Bring it on!

      I have a new article in Salon on perhaps the most misunderstood
      subject in energy -- peak oil.

      Here is the short version:

      1. We are at or near the peak of cheap conventional oil production.
      2. There is no realistic prospect that the conventional oil
      supply can keep up with current projected demand for much longer --
      if the industrialized countries don't take strong action to sharply
      reduce consumption, and if China and India don't take strong action
      to sharply reduce consumption growth.
      3. Many people are expecting unconventional oil -- such as the
      tar sands and liquid coal -- to make up the supply shortage. That
      would be a climate catastrophe, and I (optimistically) believe
      humanity is wise enough not to let that happen. More supply is not
      the answer to either our oil or climate problem.
      4. Nonetheless, contrary to popular belief, the peak oil problem
      will not "destroy suburbia" or the American way of life. Only
      unrestrained emissions of greenhouse gases can do that.
      5. We have the two primary solutions to peak oil at hand: fuel
      efficiency and plug-in hybrid electric vehicles run on zero-carbon
      electricity. The only question is whether conservatives will let
      progressives accelerate those solutions into the marketplace before
      it is too late to prevent a devastating oil shock or, for that
      matter, devastating climate change.

      That last sentence has been a major focus of this blog. I discuss it
      briefly in the article, but let me elaborate on it here. For more
      than two decades, conservatives have put up almost every conceivable
      roadblock to a sane energy policy. They have essentially said to peak
      oil -- and catastrophic global warming, for that matter -- "Bring it on!"

      That last sentence has been a major focus of this blog. I discuss it
      briefly in the article, but let me elaborate on it here. For more
      than two decades, conservatives have put up almost every conceivable
      roadblock to a sane energy policy. They have essentially said to peak
      oil -- and catastrophic global warming, for that matter -- "Bring it on!"

      No one should be surprised we are now mired in a tar pit of growing
      dependence on oil imported from unstable or undemocratic regions, oil
      prices over $100 a barrel, a trade deficit in oil alone approaching
      $500 billion a year, and, of course, the very serious threat of
      catastrophic climate change from burning an ever-increasing amount of
      fossil fuels.

      Many of us have predicted for a very long time that a quarter century
      of ignoring or underfunding the key solutions to our addiction to oil
      would have consequences. For instance, an April 1996 article I
      coauthored warned about what the Gingrich Congress was trying to do:

      "Congressional budget-cutters threaten to end America's
      leadership in new energy technologies that could generate hundreds of
      thousands of high-wage jobs, reduce damage to the environment, and
      limit our costly, dangerous dependency on oil from the unstable
      Persian Gulf region."

      Now, absent an aggressive set of government-led policies, the oil
      situation will only get worse, with oil and gasoline prices doubling
      (or worse) in the next quarter century. Crucially, we must solve our
      oil addiction and carbon addiction together. And soon. Fatih Birol,
      chief economist of the International Energy Agency, said in November:

      These two things put together, the short term security, medium
      term security of our oil markets, plus the climate change,
      consequences of this energy use, my message is that, if we don't do
      anything very quickly, and in a bold manner, the wheels may fall off.
      Our energy system's wheels may fall off. This is the message that we
      want to give.

      The problem is urgent. And the solutions are known.

      Clearly we now have only two realistic strategies -- indeed, we have
      had only two realistic strategies for decades. We must greatly
      increase the fuel economy of our vehicles and we must find one or
      more alternative fuel sources that are abundant, low carbon, and
      affordable. Both of these are strategies that conservatives have
      strongly fought for a long time.

      Just to be clear, let's just say we adopted the favorite strategy of
      conservatives -- more supply -- and we opened the Arctic National
      Wildlife Refuge to drilling, and found enough to provide one million
      barrels a day for 30 years. That would delay the peak in oil one
      whole year! Catastrophe not averted. And of course, it would only
      make global warming harder to fight. More domestic supply is not the solution.

      Significantly, both Senators Clinton and Obama have announced plans
      to sharply increase fuel economy standards. As for McCain, one of his
      top economic advisors recently said that if his cap and trade system
      worked well enough, he might take the new standards off the books.
      That shows the McCain campaign does not understand what it will take
      to solve either the global warming or the peak oil problem.

      Let's optimistically assume we can get fuel economy standards for
      cars and SUVs of 60 miles per gallon by 2030. We would still need
      half their fuel to be zero carbon. And that's just the time-line for
      dealing with global warming. If you want a motor fuel to deal with
      peak oil, then you need something that can provide a substantial and
      rapidly growing resource starting by 2020 at the latest
      (optimistically assuming we have a decade before peak).

      Only one alternative fuel is even remotely plausible -- carbon-free

      Hydrogen is a "multi-miracle" nonstarter that became
      stake-through-the-heart dead this month when GM and Toyota told
      everyone the obvious -- we won't have "hydrogen fuel cells for
      mass-market production in the near term" but "electric cars will
      prove to be a better way to reduce fuel consumption and cut tailpipe
      emissions on a large scale." [Note to GM and Toyota: Duh!]

      Corn ethanol is, as we've seen over and over again, a total loser
      from an energy and climate -- and every other conceivable -- perspective.

      Biomass-based cellulosic biofuels hold a lot of promise, maybe even
      more promise than they held more than a decade ago when my office at
      DOE was pushing hard to develop them in the face of opposition from
      the Gingrich Congress. But we still don't have a single commercial
      cellulosic biofuels plant in operation in this country. So it will
      require massive government support for biofuels to be a major player
      by 2030, let alone 2020. Moreover, electricity is not a fuel that can
      be used for air travel and probably not for long-distance travel,
      especially by big trucks. So, again optimistically, we should
      probably assume every last drop of cellulosic biofuels will be set
      aside to cut non-automotive transportation fuel sharply in the coming decades.

      I have previously explained why I believe plug in hybrids and
      electric cars are the cars of the future, especially as a climate
      solution. The Salon article, "Peak oil? Consider it solved" talks
      about how they are the ideal peak oil solution, too.

      The bottom line is that if we solve the climate problem, we will
      solve the peak oil problem. If we don't solve the climate problem,
      peak oil will be a somewhat painful, but relatively short blip on the
      history of humanity compared to the extremely painful, multi-century
      tragedy our children and the next 50 generations after them will face.

      Peak oil? Consider it solved
      It won't be easy but we can fix our oil and climate problems at the same time.
      By Joseph Romm Mar. 28, 2008

      For more than a decade, a fierce debate about peak oil has been
      raging between those who think a peak in global oil production is at
      hand and those who think the world is not close to running out of
      oil. The debate is moot for two reasons. First, the growing threat of
      global warming requires deep reductions in national and global oil
      consumption starting now, peak or no peak. Second, relying on
      unconventional oil like tar sands and liquid coal to make up a supply
      shortage, as the oilmen say we must, would be climate catastrophe.
      More supply is not the answer to either our oil or our climate
      problem -- reducing consumption of oil is. And right now we have two
      feasible solutions: greatly increase our vehicle fuel economy and
      find alternative fuel sources that are abundant, low-carbon and affordable.

      Make no mistake about it: Soaring global oil consumption has brought
      the nation and the world to a point of reckoning. Last year,
      consumption was 86 million barrels a day, up from 78 million in 2002,
      roughly a 2 percent annual rise. Where is all the demand coming from?
      Hint: It's not just the rapidly developing countries. From 1995 to
      2004, China's annual imports grew by 2.8 million barrels a day. Ours
      grew 3.9 million. China now sucks up about 6 percent of all global
      oil exports. We demand 25 percent. American's trade deficit in oil
      alone is nearing $500 billion a year.

      That said, if by 2050, the per capita energy consumption of China and
      India were to approach that of South Korea, and if the Chinese and
      Indian populations increase at currently projected rates, those two
      super giant countries by themselves would consume more oil than the
      entire world used last year.

      This massive, unsustainable consumption has more than peak oil
      doomsayers like James Kunstler worried. In January, Jeroen van der
      Veer, chief executive officer of Royal Dutch/Shell, e-mailed his
      staff that the world will peak in conventional oil and gas within the
      decade. He wrote: "Shell estimates that after 2015 supplies of
      easy-to-access oil and gas will no longer keep up with demand." It
      used to be unheard of for oil executives to talk about limits to oil
      production. Now it happens all the time.

      John Hess, chairman of Hess Corp., a global oil and mineral
      exploration company, said recently, "An oil crisis is coming in the
      next 10 years. It's not a matter of demand. It's not a matter of
      supplies. It's both." In October, Christophe de Margerie, CEO of
      French oil company Total S.A., said that production of even 100
      million barrels a day by 2030 will be "difficult." In November, James
      Mulva, CEO of ConocoPhillips, the third biggest U.S. oil company,
      told a Wall Street conference: "I don't think we are going to see the
      supply going over 100 million barrels a day ... Where is all that
      going to come from?"

      The problem is graver than it appears for one simple reason:
      Replacing oil in the transportation sector requires strong government
      action two decades before a peak because of the time needed to
      replace vehicles and fuel infrastructure. That was the conclusion of
      a major study funded by the Department of Energy in 2005 -- yes, the
      Bush DOE -- on "Peaking of World Oil Production." The report notes:
      "The world has never faced a problem like this. Without massive
      mitigation more than a decade before the fact, the problem will be
      pervasive and will not be temporary. Previous energy transitions
      (wood to coal and coal to oil) were gradual and evolutionary; oil
      peaking will be abrupt and revolutionary."

      Ouch! The same central point is true about global warming. If we want
      global carbon dioxide emissions to peak and start declining, the
      planet will need to start aggressive mitigation policies two decades
      in advance. We're at about 30 billion tons of annual CO2 emissions
      and rising 3 percent per year. By 2020, we'll be over 40 billion tons
      annually. If we average more than 18 billion tons of CO2 a year this
      century, we risk widespread desertification, sea level rise (of 80
      feet or more) and the loss of up to 70 percent of all species.

      To preserve the livability of the planet, we must cut liquid fossil
      fuel use more than 50 percent by 2050. That is a central reason that
      more supply is not the solution to peak oil. That is why it is
      crucial we don't adopt the strategy that most in the oil industry
      prefer for dealing with the peak in conventional oil -- ramping up
      unconventional oil. Most of the major forms of unconventional oil
      will make global warming worse -- and some would make a climate
      catastrophe inevitable.

      The world has a number of viscous oils called bitumen, heavy oil and
      tar sands (or oil sands). There is more recoverable oil in Canada's
      tar sands than there is conventional oil in Saudi Arabia. Tar sands
      are pretty much the heavy gunk they sound like, and making liquid
      fuels from them requires huge amounts of energy for steam injection
      and refining. Canada is currently producing about 1 million barrels
      of oil a day from the tar sands, and that is projected to triple over
      the next two decades.

      Tar sands are doubly dirty. On the one hand, the energy-intensive
      conversion of tar sands generates two to four times the amount of
      greenhouse gases per barrel of final product as the production of
      conventional oil. On the other hand, Canada's increasing use of
      natural gas to exploit the tar sands is one reason that its exports
      of natural gas to the U.S. are projected to shrink in the coming
      years. So instead of selling clean-burning natural gas to the U.S.,
      which we could use to stop the growth of carbon-intensive coal
      generation, Canada will provide us with a more carbon-intensive oil
      to burn in our cars. That's lose-lose.

      Even more oil can probably be recovered from shale, a claylike rock,
      than from the tar sands. Most of the world's shale is found in the
      U.S., notably in Colorado and Utah. After the oil shocks of the
      1970s, billions were spent exploring the possibility of shale oil,
      but those efforts were abandoned in the 1980s when oil prices
      collapsed. Shale does not contain much energy per pound: It has
      one-tenth the energy of crude oil and one-fourth that of recycled
      phone books. Converting shale to oil requires a huge amount of energy
      -- possibly as much as 1,200 megawatts of generating capacity to
      produce 100,000 barrels per day. What a waste of energy just to
      create a fuel that would spew more greenhouse gases into the air when
      burned in a car. We must leave the shale in the ground.

      The recovery of conventional oil from a well can be enhanced by
      injecting carbon dioxide into the reservoir. Estimates for potential
      recovery are 300 billion barrels to 600 billion barrels. When carbon
      capture and storage from coal generation becomes commonplace -- which
      might occur as soon as two decades from now -- we may be awash in
      carbon dioxide that could be diverted to enhanced oil recovery. It
      would be a tragedy if that carbon dioxide was not put into deep
      underground aquifers (permanently reducing the amount of
      heat-trapping gas in the atmosphere), but instead used to extract
      more fossil fuels from the ground (which would ultimately release
      carbon dioxide into the atmosphere when burned in internal combustion
      engines). Again, more oil supply doesn't solve the climate problem.

      Coal can be converted to diesel fuel using a chemical conversion
      process called Fischer-Tropsch. During World War II, coal
      gasification and liquefaction produced more than half of the liquid
      fuel used by the German military. But the process is incredibly expensive.

      You need to spend $5 billion just to build a plant capable of
      producing 80,000 barrels of oil a day (the U.S. currently consumes
      more than 21 million barrels a day). You need about five gallons of
      water for every gallon of diesel fuel that's produced -- not a
      particularly good long-term strategy in a world facing mega-droughts
      and chronic water shortages. Worse, the total carbon dioxide
      emissions from coal-to-diesel are about double that of conventional diesel.

      You can capture the carbon dioxide from the process and store it
      underground permanently. But that will make an expensive process even
      more expensive, so it seems unlikely for the foreseeable future,
      certainly not until carbon dioxide is regulated and has a high price
      and we have a number of certified underground geologic repositories.
      More important, even if you capture the CO2 from the Fischer-Tropsch
      process, you are still left with diesel fuel, a carbon-intensive
      liquid that will release CO2 into the atmosphere once it is burned in
      an internal combustion engine.

      Coal to diesel is a bad idea for the planet. If the U.S. or China
      pursues it aggressively, catastrophic climate change will be all but

      A 2006 study by the University of California at Berkeley found that
      meeting the future shortfall of conventional oil with unconventional
      oil could increase annual emissions by more than 7 billion tons of
      carbon dioxide for several decades. That would be fatal to any effort
      to keep average annual emissions this century below 18 billion tons
      of CO2. Indeed, it would probably drive us past dangerous tipping
      points toward CO2 levels whose consequences have barely been imagined.

      Thus we come to one of the biggest questions of our time: Is humanity
      wise enough not to pursue carbon-intensive alternative fuels, even
      though pretty much all of them are economically profitable at current
      oil prices? Let me assume, optimistically, that we are. Let me also
      assume that we have more than a decade before the peak in
      conventional oil. We must act now. And by now I mean when we have a
      new president who actually cares about these issues and believes in
      government-led solutions to prevent economic losses from a major oil
      shock and devastating climate change, each of which would cost the
      U.S. trillions of dollars.

      Clearly we now have only two realistic strategies: increase our
      vehicle fuel economy and develop affordable alternative fuel sources
      that are low in carbon. In 2050, the planet may well have 2 billion
      cars on the road or more, three times the current number. To avoid
      dramatic climate impacts, we must use at least 60 percent less total
      liquid fossil fuels -- and that assumes we have essentially
      eliminated carbon dioxide emissions in the electric sector. The
      average car on the road will need to put out under one-fifth the
      emissions of current cars, or the equivalent of five times the "miles
      per gallon" of today.

      If we achieve just half of that emissions cut through greater fuel
      efficiency (and the other half through a low-carbon alternative
      fuel), we'll need new cars and SUVs in 2040 to get at least 60 miles
      per gallon. Of course, that assumes people don't drive greater
      distances, even though they will be wealthier, and a nation's per
      capita wealth has historically correlated with vehicle miles traveled.

      Increased fuel economy can be achieved either by mandates, such as
      the corporate average fuel economy (CAFE) standards, or by higher
      prices achieved through higher taxes. Certainly new technology can
      help. But no country has ever substantially increased its fuel
      economy with new technology without relying on much tougher fuel
      economy standards, higher prices or both. I have never been a big fan
      of higher gasoline taxes, not just because they are a political
      non-starter, but also because you would have to jack up taxes an
      absurd amount to get the desired impact. So that leaves tougher
      standards -- mandates. Even Europe, with much higher gasoline taxes
      than us, uses mandates.

      Late last year, after some two decades of trying, Congress passed a
      new 35-mpg standard -- after tough fighting with conservatives in
      both parties. That great achievement will take us in 2020 to where
      the Chinese are now (but not to where Japan and Europe were six years
      ago). It is worth noting that China has a minimum-allowable
      efficiency standard, not a "fleet-average" standard like ours. As the
      Toronto Star nicely explained: "No gasoline-powered car assembled in
      North America would meet China's current fuel-efficiency standard."

      Since we're being optimistic, let's assume we can get fuel economy
      standards for cars and SUVs of 60 miles per gallon by 2030. We would
      still need more than half of vehicle fuel to be zero carbon. And for
      that only one alternative fuel is even remotely plausible --
      carbon-free electricity. Plug-in hybrids and electric cars are the
      cars of the future, especially as a climate solution. What's more,
      with plug-ins and electric cars on the roads, oil peakers like
      Kunstler -- who has claimed that when the oil runs dry, suburbia
      "will become untenable" and "we will have to say farewell to easy
      motoring" -- can relax.

      Suppose that by 2020, oil blew past $300 a barrel and gasoline rose
      to $9 dollars a gallon (still not much higher than current gasoline
      prices in England). You could replace your car with a plug-in hybrid,
      and trips less than 30 miles, which have made suburbia what it is
      today, would actually cut your fuel bill by a factor of more than 10,
      even if all the electricity were from zero-carbon sources like wind
      and nuclear power. The extra cost of the vehicle would be paid for in
      fuel savings in under five years.

      The big question is how we accelerate plug-ins and E.V.s into the
      marketplace to stave off the worst of the peak oil and climate
      catastrophes. No country has ever introduced a mass-market consumer
      alternative fuel vehicle without government mandates. So again we are
      going to have to turn to progressive policies.

      Clinton and Obama (but not McCain) have detailed policies to
      jump-start the transition to plug-in hybrids. Clinton, for instance,
      plans to offer consumers tax credits of up to $10,000 for purchasing
      a plug-in hybrid. I would offer the tax credit for the first 1
      million plug-ins purchased. The effort would cost under $10 billion
      over several years -- about what this country now spends on imported
      oil in a single week! And of course we'll need a very aggressive push
      toward efficiency and zero-carbon electricity, which both Democratic
      candidates support. That is the very least we can do given the twin
      multitrillion-dollar threats of peak oil and global warming.

      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      -- -- -- -- -- -- -- -- -- -- -- --
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