How oil scarcity will affect the future from a scientific perspective

[BreakfastBurrito]

http://www.oilendgame.com/

Download the entire thing for free.

Abstract
This independent, peer-reviewed synthesis for American business and military leaders charts a roadmap for getting the United States completely, attractively, and profitably off oil. Our strategy integrates four technological ways to displace oil: using oil twice as efficiently, then substituting biofuels, saved natural gas, and, optionally, hydrogen. Fully applying today's best efficiency technologies in a doubled-GDP 2025 economy would save half the projected U.S. oil use at half its forecast cost per barrel. Non-oil substitutes for the remaining consumption would also cost less than oil. These comparisons conservatively assign zero value to avoiding oil's many "externalized" costs, including the costs incurred by military insecurity, rivalry with developing countries, pollution, and depletion. The vehicle improvements and other savings required needn't be as fast as those achieved after the 1979 oil shock.

The route we suggest for the transition beyond oil will expand customer choice and wealth, and will be led by business for profit. We propose novel public policies to accelerate this transition that are market-oriented without taxes and innovation-driven without mandates. A $180-billion investment over the next decade will yield $130-billion annual savings by 2025; revitalize the automotive, truck, aviation, and hydrocarbon industries; create a million jobs in both industrial and rural areas; rebalance trade; make the United States more secure, prosperous, equitable, and environmentally healthy; encourage other countries to get off oil too; and make the world more developed, fair, and peaceful.

[quinn132]

few small thoughts and facts.

Ok oil reserves are still huge. Currently we use about 1 barrel of oil to extract and refine 7 barrels. The majority of what we have left will take 1 barrell just to extract 2.
With this in mind prices are going to rocket.

Also major oil companys estimate their reserves. It is in their interest to tell the share holders that their reserves are huge. When in reality many declared reserves do not actually exist.

Forget cars and palnes. Farming is like mentioned one of the biggest problems. Yes the tractors use lots. fertilizers use more. Then transport of food is massive. The average distance a piece of food will travel onto a US citizens plate is 1,600 miles. For canada it is over double this. In relative terms, it takes 8 calories of oil to produce 1 calorie of food.

[quinn132]

if your intreseted search for "peak oil". The theroy is basically when production cant cope with supply. Many belive that we are pretty much at this peak. Oil companys deny this. But then again dont forget about those share holders. However can somebody please search to see why these same companys are no longer building refinerys. World oil supply is growing by around 5% per year and these refinerys are all at almost peak production.

I will tell you why these companys won't build more. Firstly they are hugely expensive. So when we reach peak oil and production goes down many will beome worth nothing more than scrap. So this for me is evidence beyond argument that the oil companys know that we are about to hit peak oil.

[arahant]

Lack of refineries has nothing to do with a belief that production has peaked. For one thing, even if production had peaked, it certainly wouldn't drop enough in the next 10-20 years to significantly change the NPV of any refinery project.

Lack of refinery construction is a result of the dramatic changes in the legal and political landscape over the last few decades.

[Girchuck]

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Why would other sources become more viable if their price is coupled to oil price? If oil price goes up, the price of these sources goes up as well. Oil shales need a lot of energy to produce.

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Because a large portion of the costs of production are fixed (primarily technology development, but also exploration, legal costs, etc.). The variable cost of the energy required for extraction (for any source) is a tiny portion of the price of energy.

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The costs of development you call fixed, are not actually fixed. Technology development requires scientists. But oil industry needs scientists too. Whoever can pay more tends to get the best, and make the fastest progress. If oil companies can pay large sums to scientists because of increased profits, the costs to develop alternative technology will rise. Exploration is only relevant for some of the alternative sources, and it has the same problem as technology development. Legal costs could concievably be an advantage for some alternatives, but a huge burden for others, like nuclear plants.
Most importantly, energy costs burned in construction and maintenance or extraction and refinement of any alternative energy source are not at all tiny.
The oil shales mentioned in this thread will require major energy investment to extract. Alberta tar sands production is already in need of nuclear reactor dedicated to producing steam with which the bitumen is cracked. Oil shales is a more difficult project.
I'll be more optimistic about ethanol, if I see an ethanol-powered ethanol production plant. So far they are powered by natural gas production of which is about to peak on this continent.
Nuclear reactors take years to build, and years to train the workforce, a crash nuclear program will increase the chance of accidents.
Solar could be increased, if the technology not coupled to silicon can be put online because the industry expects shortages of silicon wafers to begin in 2008.
Wind and tidal and geothermal are great in their limited niches, but require large initial investment which will not pay for itself for decades, and therefore probably ill-suited for any market condition, when long-term investment is discouraged. Speaking of which, how many recent long-term investments can you remember hearing about. Any new nuclear power plants being built right now? Any conservation program being implemented, perhaps? How expensive will the oil have to become for these things to begin?

[arahant]

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Why would other sources become more viable if their price is coupled to oil price? If oil price goes up, the price of these sources goes up as well. Oil shales need a lot of energy to produce.

[/ QUOTE ]
Because a large portion of the costs of production are fixed (primarily technology development, but also exploration, legal costs, etc.). The variable cost of the energy required for extraction (for any source) is a tiny portion of the price of energy.

[/ QUOTE ]

The costs of development you call fixed, are not actually fixed. Technology development requires scientists. But oil industry needs scientists too. Whoever can pay more tends to get the best, and make the fastest progress. If oil companies can pay large sums to scientists because of increased profits, the costs to develop alternative technology will rise. Exploration is only relevant for some of the alternative sources, and it has the same problem as technology development. Legal costs could concievably be an advantage for some alternatives, but a huge burden for others, like nuclear plants.
Most importantly, energy costs burned in construction and maintenance or extraction and refinement of any alternative energy source are not at all tiny.
The oil shales mentioned in this thread will require major energy investment to extract. Alberta tar sands production is already in need of nuclear reactor dedicated to producing steam with which the bitumen is cracked. Oil shales is a more difficult project.
I'll be more optimistic about ethanol, if I see an ethanol-powered ethanol production plant. So far they are powered by natural gas production of which is about to peak on this continent.
Nuclear reactors take years to build, and years to train the workforce, a crash nuclear program will increase the chance of accidents.
Solar could be increased, if the technology not coupled to silicon can be put online because the industry expects shortages of silicon wafers to begin in 2008.
Wind and tidal and geothermal are great in their limited niches, but require large initial investment which will not pay for itself for decades, and therefore probably ill-suited for any market condition, when long-term investment is discouraged. Speaking of which, how many recent long-term investments can you remember hearing about. Any new nuclear power plants being built right now? Any conservation program being implemented, perhaps? How expensive will the oil have to become for these things to begin?

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I would say that we are near the point where oil is expensive enough for nuclear already. Europeans, particularly the British, are currently building a number of new reactors. The US is more entrenched against them, but less for economic reasons than social and political ones.

The bigger problem with regard to the economics is that reactors have a MASSIVE fixed cost, so it's less the current price of oil than the future outlook. If investors knew for certain that oil would remain at $60+, we would see large scale investment.

What surprises me most is that I never see the global warming crowd (at least in the US) trying to push nuclear. It's clearly the best current alternative to fossil fuels. With one big push, we could dramatically reduce GG emissions.

Your point about the extraction energy of shales and tar is true now, but I consider the development of technology to reduce the current high marginal cost part of the fixed cost. Ultimately, we'll be using bacterial or chemical processes for the extraction, i'm sure. And my guess would be that any scientists employed by oil companies are working on precisely this problem. There is nothing exxon would like more than to be able to cheaply get at the oil in canada and the us.

[wacki]

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"[W]ith crude oil above $66 a barrel at the close of trading [on Sept. 20], oil shale is a promising alternative to crude. The Green River shale deposits in Colorado, Utah and Wyoming are estimated to contain 1.5 trillion to 1.8 trillion barrels of oil, and while not all of it can be recovered, half that amount is nearly triple the proven oil reserves of Saudi Arabia." - Rocky Mountain News

Strictly speaking, oil shale needs to be refined, but the end product is oil.

You can find estimates independently if you know how to use a search engine. The question is, why would you bother to disagree with me so arrogantly, when you could easily have spent the time looking it up and learned something?

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This article completely ignores extraction rates. Even the most optimistic companies don't project tar sands to be a major player. They also ignore extraction rates with the lower tertiary gulf find. That "massive" find will have almost no effect on the world oil market. 300 kilo-barrels a day in a 100 million barrel a day market is a joke. I can't say when the peak/plateau will hit but a lot of the reasons the "don't worry" people use just aren't good reasons at all.

[wacki]

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The problem is that there is currently no conceivable energy source (or combination of sources) that can replace oil any time soon (even with tonnes of research).

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This is flat out wrong. There are at least 4 very promising battery techs that can make oil a slow, expensive, and cumbersome tech. Yes they are a ways off but they show a lot of promise. There are also several chemical based techs that are promising as well. Research is being neglected or cut.

The signal to noise ratio in this thread is depressing.

[wacki]

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We will have to come up for an alternative plastic. That will be the toughest part.

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No, it won't.

Everyone really needs to read this:
http://tinyurl.com/y7mg2x

Seriously, where is everyone getting their news?


quin:

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if your intreseted search for "peak oil". The theroy is basically when production cant cope with supply. Many belive that we are pretty much at this peak. Oil companys deny this.

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This is not true. Connoco, Shell, BP and Chevron all say the peak is dangerously near.
http://www.willyoujoinus.com/

From chevron:

The 20th century was marked by rapid growth and an increase in prosperity throughout the world.1 But the past pales in comparison to the pace at which the 21st century is advancing.2 Populations are increasing, economies are developing, and the world is consuming energy faster than ever before.3

By 2020, some experts predict the world's energy consumption will be 40% higher than it is today.4 Efficiency, improvements, and conservation are part of the solution, but will not, in themselves, meet the need for more energy.5

Not the most optimistic words from an oil company.

Everyone needs to read Robert Rapiers blog or check out the oildrum. The real danger is what people are calling "peak lite" where demand outstrips supply.

arahant,

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What surprises me most is that I never see the global warming crowd (at least in the US) trying to push nuclear. It's clearly the best current alternative to fossil fuels. With one big push, we could dramatically reduce GG emissions.

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The problem is breeder reactors. Right now fuel is safe to use but expanding nuclear means taking terrible risks with fuels that are extremely easy to build a nuclear bomb with. Not even the nuclear people want to expand nuclear.

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In 100 years, the mix will be 30% FF's, 40% nuclear, 20% solar, and 10% other.

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If we are still using 30% FF's in 100 years there will be a lot of very sick people on this planet.

[Torgeir23]

Haven't read the other replies yet so sorry if I am just repeating

Given the proper incentives, mankind is very creative and can easily find new sources of energy. Right now the price of oil is relatively cheap and therefore not much research into alternative energy sources is undertaken.

If the price were to rise to, say, $150 per barrel, research into alternative energy would become more profitable and we would therefore find new sources of energy.

So as long as we have efficient markets, I do not believe the world would face a major energy crisis. Oil prices could rise for short periods of time and put more pressure on the world economy than during this summer. but would eventually lead to discoveries of new energy sources which would make the world a lot less reliant of oil.