At last, peak oil has an official date

A frogblog fan reminded me about this lovely article from Monbiot just before the Christmas break. The Guardian’s video of the interview is here. It seems the IEA spent all of 2008 doing what it should have been doing all along – analysing all the world’s conventional oil supply to see when we are going to peak. When interviewed by Monbiot, Fatih Birol of the IEA actually gave a date for the event. (This date had been conveniently left out of their report just prior to Christmas.) From the Monbiot article:

For the first time, in the interview I conducted with its chief economist Fatih Birol, it has given us a date. And it should scare the pants off anyone who understands the implications.

Fatih Birol, the lead author of the new energy outlook, is a small, shrewd, unflustered man with thick grey hair and Alistair Darling eyebrows. He explained to me that the agency’s new projections were based on a major study it had undertaken into decline rates in the world’s 800 largest oil fields. So what were its previous figures based on? “It was mainly an assumption, a global assumption about the world’s oil fields.

This year, we looked at it country by country, field by field and we looked at it also onshore and offshore. It was very very detailed. Last year it was an assumption, and this year it’s a finding of our study.” I told him that it seemed extraordinary to me that the IEA hadn’t done this work before, but had based its assessment on educated guesswork. “In fact nobody had done this research,” he told me. “This is the first publicly available data”.(11)

So was it not irresponsible to publish a decline rate of 3.7% in 2007, when there was no proper research supporting it? “No, our previous decline assumptions have always mentioned that these are assumptions to the best of our knowledge – and we also said that the declines [could be] higher than what we have assumed.”

Then I asked him a question for which I didn’t expect a straight answer: could he give me a precise date by which he expects conventional oil supplies to stop growing?

“In terms of non-OPEC [countries outside the big oil producers’ cartel]”, he replied, “we are expecting that in three, four years’ time the production of conventional oil will come to a plateau, and start to decline. … In terms of the global picture, assuming that OPEC will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau as well, which is of course not good news from a global oil supply point of view.”

Around 2020. That casts the issue in quite a different light. Mr Birol’s date, if correct, gives us about 11 years to prepare. If the Hirsch report is right, we have already missed the boat.

Birol says we need a “global energy revolution” to avoid an oil crunch, including (disastrously for the environment) a massive global drive to exploit unconventional oils, such as the Canadian tar sands. But nothing on this scale has yet happened, and Hirsch suggests that even if it began today, the necessary investments and infrastructure changes could not be made in time. Fatih Birol told me “I think time is not on our side here.”

Shock. Horror. I am so surprised. This is the first publicly available research? I think not Mr Birol. But “We told you so” is always wasted breath. The more urgent issue is that like climate change, we have left it so late that it is going to cost us more than if we had acted responsibly in the first place.

So peak oil has an official date, from the official international agency that governments look to for their answers. What is New Zealand doing about it? Pretty much the same as the UK. Next to nothing. Building lots of new roads. I am not anti-road at all, but we really ought to look after the quality of the ones we have rather than building more at a time when increased demand for them will be drying up before we’ve got our money’s worth from them. Better to invest in oil independent infrastructure, of all kinds. NZ is fixated on the idea of electric cars, which is great, but the new government isn’t doing anything about it. We’ll need them. We will also need a whole heap of public transport, preferably not fossil based.

Interesting times indeed…

44 thoughts on “At last, peak oil has an official date

  1. If Peak Oil does eventuate, demand for roads won’t dry up. As has been pointed out numerous times, cars do not require petrol. We can run cars on a number of alternative fuel sources.

    The car genie ‘aint going back in the bottle.

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  2. Demand for oil may have peaked:

    http://www.guardian.co.uk/business/feedarticle/8290979

    “Oil’s jump to more than $100 a barrel a year ago increased interest in peak oil supply, a theory that had long been consigned to the fringes of informed opinion.
    This issue has faded as economic slowdown eroded demand, meaning supply is abundant for now and consumption is key to shaping oil market sentiment.
    “The term (peak demand) has become fashionable over the last year, but applied to OECD, not global demand,” said Newedge’s Halff.”

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  3. Supply related to demand is how price is set.

    Absolute supply is not however, dependent on demand.

    Please be careful how you say this stuff. People might not realize that you aren’t a Green. :-)

    BJ

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  4. Icebaby, so we’ll just find a new fuel with the same energy density and EROEI (energy return on energy invested) as petrol and then convert the world’s 600 million vehicles to it in the next few years? Throw in the millions of service stations and distribution infrastructure and it sounds easy right?

    BTW, such a fuel does not yet exist.

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  5. On a related note, has someone in the Green strategy team been fired?

    http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10553686

    “Having slammed the door shut to working with National a mere three months ago, the Greens now want to reopen it. How else to interpret Russel Norman’s speech last Sunday other than as a plea to National to talk?….The Prime Minister’s response was immediate and positive, inviting the Greens’ leadership to a sit-down chat when Parliament resumes next month”

    Key gets MMP, obviously…..

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  6. Armstrong’s interpretation that the Greens have changed their tune is very wrong, as they’ve said nothing different since before the election, i.e. won’t form a govt with National, but will work with them where possible. Russel’s speech is just a continuation of this position. Key has said he’d meet with the Greens at least three times now, so that’s not different either. What would be different is if he actually does so. There was no reason to do it pre-Christmas when his agenda was to reverse most of the environmental legislation the Greens were involved with.

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  7. That 2020 figure is based on estimates of OPEC oil production and may be seriously optimistic. It all depends on the extent that people advising the powers that be are saying what those powers want to hear. No one wants to be the bearer of bad news particularly in some countries.

    The sooner we start preparing for it, the better we can cope and possibly even take advantage of the crisis that will come.

    Trevor.

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  8. >>won’t form a govt with National but will work with them where possible

    Department of redundancy department….

    But I’ll be glad to see some working together. Who knows – it might send a clear message to the Green strategy team that the electorate wants solutions to problems, not poodle politics serving some foggy far-left agenda.

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  9. “Department of redundancy department….”

    From someone who claims to know so much about MMP…

    “…it might send a clear message to the Green strategy team…”

    The “Green strategy team” works with the political positioning that the Party membership hands it at AGM. Positioning ain’t up to individuals, including co-leaders. Surely you’ve been around here long enough to know that.

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  10. A ‘global assumption about the worlds oil fields’ has become fact? And the methodology was? And the assessment of fields yet to be tapped is? It takes awhile to reverse out of this much horse-puckey.
    Whenever a monopoly is threatened a certain amount of obfuscation is to be expected.
    Certainly China was to be supplied (and still is) with all the oil it’s leapfrogging demand requires…
    For mine, the notion is specious – it has more to do with the world ‘turning it’s back’ on oil.
    A rumour of limited supply is perhaps the oldest of marketing ploys.

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  11. EROEI (energy return on energy invested) is meaningless in this context, and is one of the consistent misunderstangings of many in the peak oil movement.

    For example, a battery has (and has always had) a very poor EROEI but we continue to use them because (a) they are useful and (b) we have the nenergy available to make it possible.

    So to say that when EROEI of oil extraction drops below unity we’ll stop extracting oil is just plain daft. While we have need and have the energy to extract we will continue to do so, because the end product is so valuable.

    Some research suggetss it is possible to replace all NZs passenger vehicles with electric vehicles, with some assumed adjustments in vehicle use and behaviour, see the paper “The feasibility of long range battery electric cars in New Zealand” [link]. A mere 464 3MW wind turbines could power the fleet. Their overall (“conservative”) estimate of power need is 4,878 GWH/Yr.

    On the other hand, we currently use 150K bbl/day of oil, which has an annual energy equivalent of 93,075 GWH/Yr, which is a very different number…

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  12. No Mark, you clearly were not reading the article. The IEA used to rubbish peak oil based on their ‘global assumption about the worlds oil fields’. Now that they have actually done the homework, which the peak oil community has been doing for years, they admit that their assumptions are wrong and that the peakists are right. If you want to see the methodology, get the report at http://www.worldenergyoutlook.org

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  13. dbuckley

    Interesting link. Is this the free version? http://www.neri.org.nz/pdfs/e5/duke_ets_2008.pdf

    I wonder why they always bring up range as a defining issue. Range isn’t an issue, so long as you get the infrastructure right. I guess it’s expensive to ramp it up, but no more so than providing LPG. We did that without too much issue in the 70s.

    The side benefit, as far as the greens are concerned, is that we’d invest in more electrical generation, which may well be wind powered if that report is correct. This would displace oil use.

    Perhaps the Greens need to see the big picture, and start lovin’ cars ;)

    http://www.msnbc.msn.com/id/22783747/

    Better Place has the right idea, methinks. Swap out the batteries on longer journeys.

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  14. Frog,

    There is a major decrepency in the report. They lump th Russian oil fields in the Non-OPEC producers declining resources.

    Yet they do not publish the Russian residual oil fields potential yeild.

    Reason is simple, they dont know because the Russians are not telling.

    With TWO major oil producers (OPEC and Russia) but with residual ol capacity figures from only. How can they claim anything?

    Not saying it is not peak oil, but untill the report can include an accurate figure from the Russian reserves, you cannot make that statement.

    Only Putin and his cronnes know how much residual oil reserves they have and I suspect they are not telling anyone. Simply waiting for OPEC to run dry and inflate the price of crude before pumping more and more at a high price.

    Interesting State versus private ownership battle over oil field in Russia with Putin hellbent on gaining State control. Why bother if the wells are running dry?

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  15. Whether the numbers are available publicly, I have a fiver that says that the IEA knows what the Russian numbers are. Maybe unofficially but i’d bet they know to the same degree of accuracy as Putin does.

    BJ

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  16. Icebaby wonders “why they always bring up range as a defining issue.” Probably because they want to sell these cars to ordinary people who, for reasons that are not entirely rational and definitely not logical, identify range as the biggest drawback after lack of performance. Laptop makers have found exactly the same consumer focus on battery life even though most users rarely spend more than an hour away from a recharge point such as the car cigarette lighter.

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  17. Birol says the about face is the result of “Last year it was an assumption, and this year it’s a finding of our study” which “looked at it country by country, field by field and we looked at it also onshore and offshore. It was very very detailed.”

    Can we look forward to the Greens to take a similar approach to the options for adapting to peak oil? Looking at existing implementations country by country, mode by mode and also in town and out of town?

    Even a cursory use of this approach reveals some serious overestimation of potential benefits of the some of the most widely promoted solutions.

    Reintroducing the railhead limit could halve the tonne/kms carried by road, but because it does so by targetting the trucks with the best fuel efficiency per tonne/km it will only reduce freight diesel consumption by one-third.

    Park and ride schemes such as the Northern Busway eliminate the most fuel efficient part of the commute, the slow steady speed crawl along the motorway with the engine warmed up. Thus a three-quarters reduction in km travelled by car will only result in half as much fuel being used.

    Comparison of fuel use per passenger mile in the EU and the USA shows that EU urban densities make buses twice as efficient as cars but USA urban densities give buses no advantage over cars except in the peak periods. But there is a dramatic difference bewteen cars/buses and SUVs. Logically one would invest in buses as a solution to post-peak oil mobility only where urban densities approach those of Europe. At lower urban densities strategies to get off-roaders off the roads make more sense.

    We shouldn’t forget that more than half of our car journeys are discretionary, and mostly for convenience shopping. The only real cost of foregoing those journeys is psychological.

    The greatest potential for improving the fuel efficiency of the average car lies in just two mechanical components – the engine and the transmission. Fortunately these are the two most easily replaced components. A handful of models account for almost half of the traffic on our roads. It actually will be possible for half the NZ vehicle fleet to become 30% more fuel efficient without having to wait for the normal vehicle replacement cycle to run it’s course (15-20 years) or needing to find a huge amount of money to accelerate the replacement cycle to stay ahead of falling fuel supplies.

    A final and simple example of the need to look closely at each option is the case for hybrid cars. They are a wise investment for city commuters and a foolish investment for country dwellers, but for townies it could go either way.

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  18. >>people who, for reasons that are not entirely rational and definitely not logical, identify range as the biggest drawback

    Right. It’s not as if they always drive with a full tank of petrol anyway.
    (apologies for the id swapping – FrogBlog weirdness blocks my postings every now and then)

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  19. Note this appears to only be about ‘conventional oil’ yet technology is making the unconventional conventional. So the peak may not be a peak in total oil production.

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  20. insider – the IEA says all liquids will peak about 2030, while conventional oil, (crude and crude condensate) will peak about 2020, or sooner if the global credit squeeze prevents enough investment to offset the 6.7% annual decline in existing fields.In either instance, we are still talking about a total peak in 20 or so years.

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  21. Frog – and that’s based on the results of the IEA research – which peak oil geologists would suggest seriously over-estimates reserves. They’ve come back from a target peak oil date of 2037 to 2020 in just one year because they finally decided they should do their job properly and base their projections on some research.

    This doesn’t immediately fill me with confidence that they’ve got it right and haven’t still done a little face-saving over-estimation..

    I’d love to see a serious debate over their research between the IEA researchers and the ASPO researchers. I expect that both ASPO and sites such as the Oil Drum will be digging into these latest IEA numbers quite seriously over the next months. Should be an interesting debate.

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  22. I read the article Frog – just didn’t research it this time as I’ve been hearing about ‘peak oil’ panic for 45 years and can’t help but be a little skeptical.
    We do not know what we do not know in terms of potential. I don’t hold the evidence proferred as conclusive.
    I do know (having worked in the dirty oil biz) that the big Corps themselves do not believe in peak oil privately, whilst bolstering prices with every mechanism they can lever.
    But if they were also planning to supply all China’s need’s for the forseeable future – where was this oil going to come from?
    Anyway, I’ve been wrong before too – but am ultra-cautious about this one.

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  23. Interesting research paper:

    Metro Los Angeles had the second smallest total carbon footprint of the 100 largest US cities. And its carbon emissions from highway transportation were the fifth-lowest in the US, one place better than what I thought was more transit-reliant Philadelphia. My wager: All those cars on the freeways aren’t driving as far as the cars around here are.

    By comparison, New York’s total carbon footprint was the 4th smallest (though it took top honors in the transportation category).

    The metro area with the smallest total carbon footprint? Honolulu.

    The probable reason for LA’s high ranking? In spite of being famous for its sprawl LA has moved more than most cities towards being a medium density multipolar city which means its average trip distances are smaller than in most cities. And its mild climate means lower levels of heating and cooling.
    And presumably a higher than normal level of hydro power. (not sure)

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  24. Owen – Where’s a link? It is grossly unfair to tease our appetites with details without posting a link to the meat.

    ( sorry Phil )

    respectfully
    BJ

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  25. Icebaby – same author, different paper, though having had a very quick read there is stuff in common betwixt the two. The feasibility paper has more detail.

    Range is important – my commute is 61KM each way, which I currently do with a 6.5L/100KM car (it thinks is a 5.5 car but in reality it is a 6.5). Most frequently on my own, but sometimes with two bodies, and today with three. Most of that trip is 100KM/Hr roads, and I need to be able to achieve that speed to prevent my entire day being spent commuting.

    Many EVs wont do 61KM on a charge, and unless my employer starts putting socket outlets everywhere I’ll need enough range to get back home too!

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  26. We don’t need to change everyone over at the same time. If most journeys are shorter, then most cars could run on electric.

    Those with longer journeys might use hybrids.

    So range is important – in reality – for a few, but not many.

    The range of my car is currently around 20km, mainly because I need to fill it up :) I don’t demand that it *always* has a 300km range (or whatever)

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  27. I’m with BP on the fact that range is not as important as it is usually claimed to be. If the rule of thumb, that 80% of all travel is within 10 km of home, then lower range EVs, or what are currently called Urban Electric Vehicles UEVs, are more than up to the task. Swapping batteries in the larger EVs or using rapid charging stations like those built in California before they killed off the technology are both viable solutions. Bring em on, I say. Besides, dbuckley’s commute of 61 km is well within the range of most current EV models.

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  28. Two great places to recharge and electric car.
    At home in the garage.
    And at parking meters and other public parking spaces.
    We can use the technology developed here by Prof John Boys which allows power transfer between a plate laid just below the seal surface and a similar plate in the vehicle.
    So as long as you are in roughly the right position you can charge your car without plugging it in etc.

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  29. Too right Owen. I have seen the technology in action. We could also replace the overhead bus wires in Wellington, and put them into the pavement with the next generation from the same lab. They have exported such all over the world to run robotic fork lifts in warehouses. Great stuff.

    When I met with the team from UniServices, they thought that putting the pads at the lights of major intersections, where cars stop for a minute or two, would be sufficient. Each car would be charged via it’s onboard smart card, not unlike the snapper card technology or the toll-pucks used overseas.

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  30. I see one of the more significant uses of the car recharging pads being at taxi stands, for PHEV taxis. Another application would be bus stops, particularly those at the end of the line.

    The traffic light idea sounds good, and might earn enough to pay for itself, but wouldn’t help longer distance commuters, simply because such commutes are usually on roads without many traffic lights, and many of those will be green.

    Trevor.

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  31. A presentation at Houston last year examined some of the new technologies coming on stream and one was the use of electronic guides built into HOT lanes so that the driver could let go of the wheel and the cars would form electronic “trains”. I discussed John Boy’s technology with him and pointed out that the car could be charged up as it went down the same lane.
    I believe the two teams are now in contact.
    (I helped fund this technology many years ago when I was in the Venture Capital business.) The other great property is that it is safe. The pads or lines are under the seal so there is no risk of electric shock. Transmission losses can be reduced by have series of loops which are triggered by vehicle presence so only the useful loops are powered up.

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  32. Regarding the brookings article, I’m glad to see you posting reports that encourage higher density living Owen. Have you finally seen the value of urban limits?

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  33. Owen: I look forward to that technology. A car is a great tool to get from place to place but it is a complete pain that I have to drive it; I’d rather be frogblogging or sleeping or whatever. Or just watching beautiful Canterbury cruise by. I get quite envious every time I watch Demolition Man and Sandra Bullock says “autodrive on”…

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  34. It’s also quite an anti-social and unhealthy way to get around. I like walking to the bus stop and briefly chatting with the bus driver in the morning. I like the social interaction that one gets on a metro in European cities. The Paris metro is fantastic for this, you experience so much more of life than you do stuck in a car.

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  35. MUL’s have no value.

    I wrote the codes back in the sixties which allowed metropolitan Auckland to become quite a medium density city along with LA.

    It worked well through the seventies and eighties and then the ARC won its case to impose an MUL and by the mid nineties prices were beginning to rise much faster than inflation. My report to the Reserve Bank warned of this outcome but governments did not respond but I did become a member of a world wide club which has been warning of MULs and Smart Growth ever since.

    Do you really believe that MULs provide benefits which exceed the losses being experienced today because of the collapse of the great Smart Growth property bubble?

    There is a big difference between enabling density (as my work did) and forcing it. My work in the sixties showed that the only benefit of providing for higher density was to increase choices available. All other claimed benefits are ephemeral and become even costlier when forced on populations.

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  36. Jarbury – for most of my life I’ve been a big city dweller and used public transport, but where I live now the public transport options are non-existant. They pulled the railway line up in 1959 :(

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  37. While we wait for some of the technology to be developed, we might as well convert some of our petrol-powered vehicles to CNG.

    To keep enough CNG available to last a while, we need to increase our renewable electricity generation and encourage the use of electricity rather than CNG at times when the renewable generation exceeds the demand. We can also invest in H2 production by electrolysis to use more of that off-peak power instead of using CNG to make H2. (Hydrogen is used at both the ammonia-urea plant and the oil refinery.)

    Eventually we will be able to use hydrogen to convert pretty much any biomass to CNG and other hydrocarbons.

    Electric vehicle will have a place, but it will be a while before most households will have one.

    Trevor.

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  38. http://ti.org/antiplanner/

    Go here to see a current debate on driverless cars.

    My own view is that the technology will be launched on truck/bus lanes where the benefits would be high to the users and the technology cost would be covered in the tolls.

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