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EXCLUSIVE: The Oil Supply and Demand Situation. An ATSNN Outlook

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posted on Apr, 1 2004 @ 01:02 PM
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80 million barrels a day (b/d). That�s how much oil the world consumes to meet its energy needs. The United States alone uses 20 million b/d. To put this in perspective, if Bill Gates spent $80 million a day he would be bankrupt in just over a year. Of course the world has more oil than Bill Gates has money, but one advantage that Bill Gates has is that he can earn more. Oil is a finite resource than cannot be replenished. Once we run out we must find other means to move our cars, trains, and airplanes. How much oil do we have, and how long will production keep up with the growing demand? What other energy sources can we use when oil is too expensive or not easily obtained?
 


To help answer these questions I asked the experts at the Institute for the Analysis of Global Security (IAGS) for their input on the current situation. IAGS is a �non-profit public educational organization dedicated to research and public debate on issues related to world�s security with special interest in energy security.� Dr. Gal Luft, the executive director of IAGS was kind enough to answer my questions, without asking for anything in return. So, special thanks to him and IAGS for their insight.

Initially I had thought of having a more traditional news article to address these issues, but there was so much good information in Dr. Luft�s responses that I decided to leave it as a question and answer session. That way everyone could have the benefit of his knowledge in this area. To start off the questions, we begin with the popular Hubbert Peak theory.

Q: A prominent theory is the so-called Hubbert Peak Oil Theory, which was named after the late geophysicist, Dr. M. King Hubbert. Hubbert predicted that U.S. oil production would peak in the early 1970�s, and the world�s oil production would peak shortly after the year 2000. His predictions were based on findings such as oil discovery and the rate of consumption. It turns out that his predictions on the U.S. production were accurate. Can we assume that he found the correct formula for predicting the future of oil supply?

Not necessarily. Unlike other oil domains in the world, the U.S. is well explored and we have a good sense of how much oil exists here and determine how far we are from peak production. Other parts of the world are much less explored such as the Caspian and parts of the Middle East and Russia.
Hubbert's bell curve could still get flattened and extended if there is a breakthrough in exploration technology. Furthermore, Hubbert calculation was based on the assessment of availability of the oil that is cheaply accessed. It does not include heavy oil, oil from tar sands or shale, oil found under water deeper than about 1,500 feet, polar oil or gas liquids found in gas fields.

The amount of oil that can ultimately be recovered � and what oil should be included in that count � are major points of contention in this debate. One thing is almost certain: we will only know that we reached peak production several years after this point has been reached, not beforehand.


Q: Does the fact that growth in oil production has been relatively flat [Francis 2004] since 2000; mean that Hubbert was correct in his assessment, or do you expect production to rise as demand increases?

I expect supply to rise a little in the next few years after which we are likely to see decline in production as demand rises. Many factors will influence the pace of the process: China�s ability to sustain its staggering growth, the state of global economy, the situation in the Middle East and the Caspian etc.
A forecast assuming an average of 24 billion barrels of new oil discovered each year between 1995 and 2025 should be treated with skepticism if, in reality, between 1995 and 2002 an average of only about 10 billion barrels a year have been found. In fact, since 1980 oil production has exceeded new field discoveries by considerable margin. About 75 percent of the oil produced today comes from less than one percent of all fields. These are giant fields requiring no sophisticated techniques in order to be discovered. But most of these fields are aging and in decline and the new fields discovered are smaller. The average age of the world�s 14 largest oilfields, which together account for more than a fifth of total oil output, is more than 43 years. Of the next largest 102 oilfields, together contributing about half of total world supply, most have been in production for more than twenty years. Production from many of these fields is declining rapidly as their reserves are depleted.
To expand production capacity, the oil industry is faced with heavy investment to replace ageing infrastructure. Capital needs of the industry are staggering. Oil companies admit that to meet projected demand in 2010 the industry would need to invest up to $1 trillion, which is substantially more than it is spending today


Q: How do we know that each nation�s assessment of their recoverable oil is correct? It seems that it would be in each country�s interest to stretch the truth on how much oil they have. Some OPEC countries have shown no decrease in total recoverable oil for years. [MacKenzie 2000] Shell cut their reserve estimates by 20% this year. Is there an organization that monitors the reserve estimates?

Reserve assessment has always been fuzzy business especially when dealing with countries with very low credibility. Many of the optimistic assessments are based on predictions that have proved to be misplaced. There is ample evidence that many oil-producing countries cook the books inflating the reports about their reserves in order to attract foreign investment or secure more favorable OPEC quotes. In 1987, for example, despite the fact that it was in the midst of war with Iran and its oil industry was mostly static, Iraq claimed to have more than doubled its reported reserves from 47 bbl to 100 bbl. The increase was a lie: it was just creative bookkeeping designed to increase Baghdad's OPEC quota rather than the result of new oil discoveries. (For more on this see, How Much Oil Does Iraq Have? www.brookings.edu... ) Almost all OPEC countries have done the same. The entire world assumes Saudi Arabia and the other major producers can carry everyone's energy needs on its back cheaply. But this could turn out not to be the case. The problem is that there is no mechanism of true energy transparency. The International Energy Agency and other organizations must roll up their sleeves and work to obtain far better demand and cost data and far better decline data from oil producing countries. Each one of the producers should provide field by field production and well-by-well data, budget details and third party engineering reports so we can have a more accurate assessment on where we stand. The stakes are too high.


Q: Speaking of demand, China has surpassed Japan [Buttonwood 2004] as the second largest user of crude oil in the world. I don�t suspect that the U.S. or Japan is willing to give up its usage to help China. This means that the world�s demand for crude oil keeps increasing, as more and more countries want a modern society. How much of the world is trying to catch up, or how much increase in demand do you suspect there will be.

Global population is projected to reach eight billion by 2025 with more than half those additional people born in Asia and Latin America; the number of cars will by then increase to well over 1.1 billion from approximately 550 million today. As a result, transportation will absorb more than half of total oil consumption in the world. According to the International Energy Agency, oil demand is projected to grow by 1.6 percent per year, from 80 million barrels per day (mb/d) today to 89 mb/d in 2010 and 120 mb/d in 2030. This projection assumes the market can deliver such quantities but we doubt this. China and India together are a third of humanity. Their oil demand grows at a rapid pace. In 2003 China�s oil demand grew by 30% and it auto market by 75%. If China�s demand continues to grow we are heading to a very difficult era unless we curb demand through increased efficiency or move into alternatives. The oil market cannot accommodate another huge consumer like the U.S. (For more on China see, US, China Are on Collision Course Over Oil www.iags.org... and The Sino-Saudi Connection www.commentarymagazine.com... ; for more on India, INDIA'S ENERGY SECURITY CHALLENGE www.iags.org... )


Q: So, we have more and more countries wanting more crude oil for their energy needs. It looks as if most countries are putting out at 90% - 100% capacity. [Business Week 2000] The main exception to this rule would be Saudi Arabia who is only using 72% of capacity. UAE and Kuwait are 84% and 70% capacity, but neither one could produce more than an extra 1 million barrels a day (b/d). Where does the increase in oil come from?

Spare capacity in the oil market is eroding. This means the oil market is losing is liquidity. No country wants to invest money on infrastructure that sits idle most of the time so there is very little room to maneuver in the market. The Saudis claim they have 2-3mbd of spare capacity but this figure seems to be exaggerated. The implications of loss of spare capacity could be severe. It means that if a major producer like Nigeria, Iraq or Venezuela goes offline due to strike, riots or terror attack there will be nobody to replace it and there will be nothing to stop the price of oil from going through the roof.


Q: The New York Times ran an article this year saying that the Ghawar, Saudi Arabia�s largest oil field, was tiring. [Gerth 2004] The pressure in Arabia�s fields is kept up by pumping 7 million barrels of water a day into the ground. [Ignatius 2003] Saudi Arabia has increased their production in the past to keep the world from having market shortages? Can we continue to count on them, or is that time gone?

The Saudis have not been transparent when it comes to their reserve data and so far we have taken them at their word. However, in a new study soon to be released, Matthew R. Simmons, president of Simmons and Company International, a specialized energy investment banking firm, claims that Saudi reserve figures are not reliable. He argues that Saudi Arabia's oil fields now are in decline, that the country will not be able to satisfy the world's thirst for oil in coming years and that its capacity will not climb much higher than its current capacity of 10mbd. Considering the growth in demand, this could easily spark a global energy crisis. Simmons� work seems credible to us. He analyzed 200 technical papers on Saudi reserves by the Society of Petroleum Engineers and his work was peer reviewed by dozen senior technical experts. Of course the Saudis rushed to refute his work but until they open their books and allow a third party to investigate their reserve data we will never know who is right. (for more, see New study raises doubts about Saudi oil reserves www.iags.org... )


Q: Realistically, the total amount of oil in the world has been in decline, since the first barrel was produced in the 1800�s. Since the Earth is a sphere, and all spheres are finite, then there is a finite amount of oil left. What is the actual amount of oil left? How long will it last? Does anyone know this?


There is no way we can tell how much oil is left on the planet. Since the shift from coal to oil, the world has already consumed more than 875 billion barrels. Geologists estimate global ultimate recoverable reserves within the range of 1,600 to 2,600 billion barrels. The U.S. Geological Survey (USGS) claimed an even higher estimate, close to 3,000. This may sound a lot considering the fact that the world consumes �only� 80 million barrels per day but if you consider the growth in demand that doesn�t leave the oil economy more than 2-3 decades to run. I think the USGS is wildly optimistic. There are some methodological problems in its estimate. For example, the USGS derives figures of undiscovered oil by looking at different countries and assigning a probability that oil will be found and uses the mean estimate. This is a flawed approach that gives countries credit for having lots of oil without any evidence that this is the case.

In truth, the only way we can assess the availability of undiscovered reserves is by mathematical models which are at best dubious. There are lots of numbers floating around but I wouldn�t give any of them much credence. What we do know is that oil is a finite resource and every barrel used cannot be replaced. The question should not be when will we run out of oil but when will we run out of cheaply recoverable oil. As oil becomes scarce, the cost of exploration, recovery and refining increases. Once the world reaches peak, the price of oil will never go down and it will be commercially unfeasible to maintain the oil economy in its present form. When price of a barrel reaches $80 people would not be able to afford driving SUVs running on 10 miles per gallon.


Q: Are the Canadian oil sands an actual source of oil, or does it take more energy to extract the oil than is gained?

Oil sand is mud-like material composed of sand, water and clay wrapped in thick hydrocarbon called bitumen. Once the bitumen is separated from the sand and the water it can be refined into synthetic crude. Canadian officials claim that approximately 300 billion barrels underlie the 30,000 sq. miles of Alberta and are ultimately recoverable. What they don�t tell us is that only about 20% of the Alberta's oil sands can be mined by the economically competitive surface mining. The rest is located in deeper layers, 75 yards and below, and can be recovered by a by a very energy intensive process which entails either heating or diluting the bitumen, making it liquid enough to accumulate in a well and then be pumped to the surface. In addition to causing severe groundwater contamination problems due to leakage of the diluting materials the process required a lot of natural gas. Natural gas markets have been wrestling with tight supplies and the price of natural gas has almost tripled in the past four years. It makes no sense for us to peg future U.S. oil supply to the whims of the natural gas market. Keep in mind: the price of natural gas is closely tied to the price of conventional oil. When the price of oil goes up, the price of gas rises accordingly, making production of crude from oil sands even more expensive. In sum, tar sands are only one of many available solutions but by no means is the silver bullet that can replace conventional crude. (for more, see Can Canadian sands replace Arabia's? www.energypulse.net... )

Q: Other issues beside supply and demand include transportation. IAGS is one of the only sites I�ve seen that mentioned the fact that oil pipelines and shipping lanes were very vulnerable points of the oil market. This gets us into the topic of terrorism. How difficult would it be to cripple the oil industry in this manner? Are the refineries and shipping lanes well guarded?

Our energy infrastructure is very vulnerable to terror attacks. Take Saudi Arabia for example: The Saudi oil system is target rich and extremely vulnerable to terrorist acts not only due to al Qaeda�s strong presence in the kingdom and its ability to carry out coordinated attacks but also because of the structure of the kingdom�s oil infrastructure.

Over half of Saudi Arabia�s oil reserves are contained in just eight fields. Each of these installations processes over 2mbd and some even more. A terrorist attack on each one of these hubs of the Saudi oil complex or a simultaneous attack on few of them is not a fictional scenario. A single terrorist cell hijacking an airplane in Kuwait or Dubai and crashing it into one of the major installations could turn the complex into an inferno. This could take up to 50% of Saudi oil off the market for at least six months and with it most of the world�s spare capacity, sending oil prices through the ceiling.

There is growing evidence that terrorists find the unpoliced sea to be their preferred domain of operation. Today, over 60% of the world's oil is shipped on 3,500 tankers through a small number of 'chokepoints' � straits and channels narrow enough to be blocked, and vulnerable to piracy and terrorism. The most important chokepoints are the Strait of Hormuz, through which 13 million barrels of oil are moved daily, Bab el-Mandab, which connects the Red Sea to the Gulf of Aden and the Arabian Sea, and the Strait of Malacca, between Indonesia and Malaysia. Thirty percent of the world's trade and 80% of Japan's crude oil passes through the latter, including half of all sea shipments of oil bound for East Asia and two-thirds of global liquefied natural gas shipments. Most of those critical chokepoints are located in areas where Islamic fundamentalism is prevalent. The Strait of Hormuz is controlled by Iran; Bab el-Mandab is controlled by Yemen, the ancestral home of bin Laden. Part of the 500-mile long Strait of Malacca courses through Indonesia's oil rich province Aceh, inhabited by one of the world�s most radical Muslim populations. Many terror experts have expressed concern that terrorists might seize a ship or a boat or even a one-man submarine and crash it into a supertanker in one of the chokepoints. Were terrorists to attack such a vessel the resulting explosion and spreading stain of burning oil could shut down the channel for weeks, with a profound impact on global markets and the maritime insurance industry. (for more see, Terror's next target www.iags.org... )


Q: How did it end up that most of the world�s oil is in countries that are know for terrorism? Does the wealth from the oil encourage this behavior? Is there a connection between the two?

Nearly in every country in which the economy is governed by oil, whether in Africa, Latin America, or the Caspian, is corrupt and dictatorial. Oil countries suffer from what economists call the �natural resource curse,� meaning that the more an economy is based on oil or other minerals, the lower its growth rate. A constant inflow of foreign exchange into an oil producing country leads to appreciation of its currency, making it difficult for local manufacturers to compete. People lose the motivation to innovate or increase their productivity. Instead, they occupy themselves searching for ways to dip into the spoils. Governments generate great wealth without accountability. In extreme cases like Saudi Arabia, a social contract is offered: the government pockets the oil revenues--around 80 percent of Saudi government revenues come from oil--and no taxes are imposed on the population. In exchange, the government provides all social services from cradle to grave free of charge. Being reliant on one source of income, oil-producing countries are extremely sensitive to drops in oil prices. Over the years the regimes become detached from their peoples, class divisions are created due to uneven distribution of wealth and a cycle of resentment and instability develops.
Over time, governments of oil producing countries, especially in the Middle East, have developed various mechanisms to deal with their disgruntled populations. Multiple security apparatuses create an atmosphere of terror and repression, the media is tightly controlled by the regimes, while the Islamic religious establishment provides comfort and spiritual outlet. In many cases, the religious establishment began to challenge the legitimacy of the regime and in some cases it even replaced it such as in the case of Iran. To contain the radicals, oil monarchies in the Gulf, mainly in Saudi Arabia, buy their legitimacy from an ultra-conservative religious establishment. Symbiotic relations are formed between the rulers and the clergy. The Islamists use oil money to globally propagate hostility to the West, modernity, non-Muslims, and women. (for more see Fueling Terror www.iags.org... ) The U.S. is an ideal lightening rod to capture popular anger. Its free-spirited way of life, its egalitarianism, its democratic political system, its functioning social institutions and its support for Israel have all been invoked to deflect people�s bitterness of their own failing social system where corruption, burgeoning population and lack of economic opportunity pervade. In recent years this dynamic has given rise to new radical forces of change aspiring to destroy the current system and install a �pure and uncorrupted� system instead.


Q: Since there haven�t been any weapons of mass destruction (WMD) found in Iraq. It seems that the only reason to be in Iraq with a military force is to secure the U.S. oil future. Other countries in the world have more instability and greater reason to intervene if this was just a human rights issue. We are spending billions on this war. If you included this in the cost of gasoline, what is the actual price you pay? Obviously the price at the pump is just one line item.

As it is, the cost of securing our access to Middle East oil -- deploying U.S. forces in the Persian Gulf, patrolling its water and supplying military assistance to Middle East countries -- is estimated at anywhere between $40 and $65 billion per year.
The National Defense Council Foundation (www.ndcf.org... ), a Virginia-based research and educational institution has completed its year-long analysis of the �hidden cost� of imported oil. They investigated the military and economic penalty our undue dependence on imported oil exacts from the U.S. economy. Included in this economic toll are:
� Almost $49.1 billion in annual defense outlays to maintain the capability to defend the flow of Persian Gulf Oil � the equivalent of adding $1.17 to the price of a gallon of gasoline;
� The loss of 828,400 jobs in the U.S. economy;
� The loss of $159.9 billion in GNP annually;
� The loss of $13.4 billion in federal and state revenues annually;
� Total economic penalties of from $297.2 to $304.9 billion annually.
If reflected at the gasoline pump, these �hidden costs� would raise the price of a gallon of gasoline to over $5.28, a fill-up would be over $105. (Also see, How much are we paying for a gallon of gas? www.iags.org... )


Q: What is the likely hood of more �oil wars� as the world realizes that it is running low, and countries compete for resources? Lately, the news has been full of interesting bits such as Japan signing oil contracts with Iran. Japan and China are debating on where Russia should build their newest pipeline. Venezuela has threatened to start a �100 year war� if the U.S. tries to intervene like it did in Haiti. (I�ve even heard the rumor that Haiti was a launching pad to invade Venezuela.) How long till debate breaks down into fighting?

The notion of oil wars is not new. The Japanese attack on Pearl Harbor was partly due to Japan�s dependence on oil. So was the German invasion of Russia in 1941. As long as oil is an essential strategic resource, countries will do everything they can to secure their access to the world�s oil fields. The scarcer oil becomes, the stronger the likelihood for oil wars. We are in a unique moment in human history in which technology allows us to transition our economy from oil into next generation fuels. If this process does not begin today with full thrust and determination, we will all be condemned to a long period of insecurity and instability.


Q: The question on everyone�s mind. Will the price of gasoline at the pump continue to rise? The U.S. is used to prices below 2.00 a gallon. How high will the price go?

Yes. Prices will go up and $2 per gallon could soon become a fond memory. It is impossible to determine how high the price could go but consumers should begin to adjust their expectations and realize that the era of cheap gasoline has ended. Having said this one need to remember that in the U.S. gasoline is still perceived as a cheap commodity. A gallon of gasoline at the service station is priced lower than a gallon of bottled water. American gasoline prices now rank among the lowest in the world for oil-importing countries, and are a third of retail prices in Europe and Japan, where steep taxes are imposed to discourage gasoline use.

ALTERNATIVE SOURCES OF ENERGY

Q: The U.S. has recently seen an increase in the number of planned coal plants. [Clayton 2004] 94 new coal-fired plants are planned across 36 states. How long will the coal supply last, and isn�t this one of the worst pollution offenders in the energy field?

The US is the Saudi Arabia of coal. We have a quarter of the world�s coal reserves, enough to last at least 200 years at current consumption rates. China and India also have significant amounts. Coal definitely has a role in our energy mix assuming we know how to utilize it properly without making our environmental problems worse. We've come a long way since the days when coal usage was synonymous with terrible pollution. These days clean coal technologies, such as gasification, allow us to build plants using coal that are among the cleanest power plants in the U.S., and to cleanly co-generate power and fuel from coal (see Clean Coal-to-Methanol project a success www.iags.org... )


Q: President Bush has recently pushed the use of hydrogen fuel cells in cars as the plan for the future. [State of the Union Address 2003] Is hydrogen the dream alternative fuel source?

The single most important thing to remember about hydrogen is that it is an energy carrier, not an energy source. Thus, it has to be produced somehow either from coal, natural gas or by using electricity (also generated from coal, natural gas or nuclear power, as well as solar, wind, hydro, and geothermal power) to split water through electrolysis. Hydrogen production is energy intensive and quite costly. Using hydrogen as an automotive fuel entails multiple technological difficulties that to date have not been satisfactorily resolved:
1. It involves a complex distribution system (using hydrogen requires a totally new and costly distribution infrastructure.)
2. The existing technologies for storing hydrogen on board - namely, high-pressure compression or liquefaction - are complex and expensive. There are some future promising technologies for on board storage of hydrogen, among them graphite fibers, carbon nanotubes, and metal hybrids. Once these technologies become available, they could gradually be incorporated into the market. But this will take a long time, which � given the national security implications of our oil dependence - we might not have.
3. Hydrogen is extremely flammable. The smallest molecule of any matter, hydrogen has a tendency to leak - thus exacerbating the flammability issue. While this is avoidable in laboratory conditions, it becomes much more complex when common vehicle maintenance is involved. To avoid this problem high safety fittings for the hydrogen system would have to be developed.
4. To power a car with hydrogen we need a fuel cell. This technology has made giant steps in recent years but the price of fuel cells is still prohibitive.
In sum the pure hydrogen solution is too costly and too far in the future to be a viable solution to today�s urgent problems. When thinking of fuel cells, a more feasible solution is one that involves hydrogen carrier fuels, hydrogen rich liquid fuels with physical characteristics similar to gasoline, which can be transported and distributed using essentially the existing infrastructure, and thus introduced to the market much more rapidly than pure hydrogen. Methanol, a hydrogen rich alcohol fuel, is of particular interest since it can be cheaply made from coal, an abundant domestic resource, and since it can be more easily reformed (that is, hydrogen can be extracted from it more easily either at the fuel station or onboard the vehicle) than other fuels.


Q: What about other more questionable methods such as solar power, wind, and nuclear energy? Are these energy sources too expensive or dangerous?

Nuclear energy is one of the most neglected and under appreciated industries. Just like other industries it has made a major progress in the past three decades. We should invest more in nuclear energy simply because we don�t have a choice. Nuclear energy is the only way we can sustain our current growth and provide power to maintain our way of life. There are many issues that need to be addressed such as safety, nuclear waste disposal and capital costs but we need to remember that our oil economy is not safe either. Three thousands people were killed on 9/11 because our country is oil dependent and many other have died in oil wars. No one in the US was killed in a nuclear accident.
Regarding renewable energy sources such as wind and solar: they are an essential element in our energy mix and we would like them to have a larger share. Today renewable energy comprises less than five percent of our energy. But most of these sources of energy are still expensive. In order to bring their price down, and level the playing field with the amply subsidized oil market, we need to provide these industries with tax credits and other incentives. In any event, we should not deceive ourselves that our energy system can be all renewable, at least not before the middle of this century.


Q: What is the best plan of action for the world? Where should we be looking to ensure that future generations have the energy for their needs?

The big bear to kill is the transportation sector. So instead of focusing on pie-in-the�sky technologies we should invest in technologies that have passed the R&D phase and can be rapidly commercialized. There is no need to wait for fuel cells. All major auto companies know how to produce flexible fuel vehicles (cars that can run on any mix of gasoline and alcohol) and hybrid vehicles at an affordable price and can ramp up production within months. The marginal additional cost of a flexible fuel vehicle is less than $100. If every car on the road was a flexible fuel car all we�d need to do is bring the alternative fuels into the market.
Particularly interesting are P-Series fuels. P-Series fuels are inexpensive fuels generated from municipal and agricultural wastes combined with ethanol and cheap natural gas liquids. These blends have been tested successfully on flexible fuel vehicles such as Ford Taurus and Dodge Caravan. They are 96% derived from domestic resources and reduce petroleum use by 80% as compared with gasoline. Use of P-Series fuels would also greatly reduce toxic emissions. P-Series fuels were examined by the Department of Energy, and in 1999 were officially designated as an "alternative fuel." P-fuels are economically competitive to gasoline. The projected retail price for P-Series including all taxes is $1.60 per gallon (New Jersey price), about the same as mid-grade gasoline in a $/mile calculation. (for more see www.iags.org... )
P-Series helps address the problem of garbage disposal. In cities like New York City or Los Angeles some 30-40,000 tons of trash are discarded each day. The present cost of disposing of one ton of trash in New York is $250 and in Los Angeles it is close to $100. Due to the closing of local landfills, it is expected that in 10 to 15 years Los Angeles trash will be put on trains and hauled 80 to 100 miles to outlying dessert landfills. New York considers exporting its garbage to the Caribbean. P-Series can utilize 60% of these cities� waste stream, cutting waste management costs hundreds of millions of dollars annually. P-Series fuels made from ethanol and municipal waste can replace 3mbd of U.S. petroleum imports. It�s time to stop wasting our waste. Let�s make fuel from it and stop sending money to those who want to hurt us.
Another very interesting solution is Plug-In Hybrid Vehicles. (see www.iags.org... )Plug-in hybrid electric vehicles are hybrid vehicles (like Toyota Prius) with an added battery. As the term suggests, plug-in hybrids can be plugged in to a 120-volt outlet and charged. Plug-ins run on the stored energy for much of a typical day's driving. Depending on the size of the battery a car could drive up to 60 miles per charge, far beyond the commute of an average American. When the charge is used up, the car automatically keeps running on the fuel in the fuel tank. A person who drives a distance shorter than the car's electric range between charges would never have to dip into the fuel tank. A plug-in that is fully charged every night can reduce emissions by 50% due to the improved fuel economy and the fact that there would be no tail pipe emissions during the electric driving phase. Plug-in can save drivers money: fuel costs for conventional vehicles stand on 7 cents per mile while the cost for plug-ins is only 3 cents per mile including the cost of electricity. Plug-in cars can reach fuel economy of 100mpg. If one in ten American cars is a plug-in, we can replace 1mbd of U.S. petroleum imports. DaimlerChrysler, in conjuction with EPRI, announced it is starting to produce plug-in hybrid Sprinter vans.

Finally there is Methanol (not ethanol). Methanol, a fuel with physical characteristics similar to gasoline, is not new to automotive transportation: because of its high performance and safety characteristics -- it is much less flammable than gasoline -- methanol has been the fuel of choice for race tracks such as the Indy 500 since the 1960s. Methanol can be produced from any carbonaceous material including natural gas and biomass (one ton of biomass can be converted to 186 gallons of methanol). The biggest potential source of methanol in the U.S. is coal. The U.S. has hundreds of years worth of coal reserves (25% of the world's total). In Kingsport, Tennessee a plant participating in the Department of Energy's Clean Coal Technology Program produces methanol from coal at a cost of $0.46 a gallon. (see Clean Coal-to-Methanol project a success www.iags.org... )
The emissions of this process are well below regulatory limits, and the coal ash is converted into slag, which is used by the construction industry for road building. The sulfur content of the coal is utilized as raw material for fertilizer production, instead of being emitted to the atmosphere as a pollutant. Mixing gasoline with methanol can replace 1.5 mbd of U.S. petroleum imports, and methanol is also a hydrogen carrier fuel � a hydrogen rich liquid fuel that is a user friendly and economically sensible way to store hydrogen for use in fuel cell vehicles. Using methanol as the hydrogen carrying fuel of choice overcomes many of the infrastructure hurdles posed by shifting to fuel cells.


Q: What can we as individuals do to help out the world�s energy situation?

We should make energy a national priority issue and demand real world solutions from our leaders. We should not assume that the problem will go away. It will not. Unless we mobilize our resources and ingenuity and make this the highest priority of our time, life on this planet will be tough. Sooner or later we will have to transition our economy anyway. A shift in the energy market is bound to happen. The question is - when? Will it happen on our terms, as a result of our concerted action, or will it be forced upon us?

Prosperity, democracy and security all hinge on a cheap, clean, uninterrupted flow of energy. It is therefore in our best interest to preemptively embark on a revolutionary change that will lead us away from the oil age rather than drag our feet and suffer the ramifications of becoming growingly dependent on an increasingly contested resource.






References:

1. Francis David R. 2004. �Has Global Oil Peaked�. The Christian Science Monitor (Jan 29,2004)

2. Buttonwood 2004. �Crude Arguments�. The Economist Global Agenda (March 23, 2004)

3. �Oil Production and Capacity�. Business Week Online (May 2000)

4. Gerth Jeff 2004. �Forecast of Rising Oil Demand Challenges Tired Saudi Fields�.
The New York Times (Feb 24, 2004)


5. Ignatius David 2003 �Check That Oil�. Washington Post (Nov 14, 2003)

6. MacKenzie James J. 2000. �Estimated Ultimately Recoverable (EUR) Oil�.
World Resources Institute (March 2000)


7. Clayton Mark 2004 �America�s New Coal Rush�. The Christian Science Monitor (Feb 26, 2004)


[Edited on 3-5-2004 by dbates]

[Edited on 18-5-2004 by dbates]



posted on Apr, 1 2004 @ 01:05 PM
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Nicely done.

I did one about peak oil on this thread.
www.abovetopsecret.com...



posted on Apr, 1 2004 @ 01:07 PM
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Great piece of work dbates, worthy of its exclusive title.

Russian: stop thunder stealing.



posted on Apr, 1 2004 @ 02:02 PM
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excellent post and very informative. it brings into perspective ALOT of things happening around the world, or should i say the mid east..hmmmmmmmmmm
the u.s. better get cracking on some alternative energy sourcess or we all be up the creek with out a paddle



posted on Apr, 1 2004 @ 02:09 PM
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Good article, haven't read it all yet, but will.

Another thing to consider:

25% of all oil use is NON-FUEL.

Examples: machinery lubrication, transparent tape, model cars, sweaters, shoe soles, antiseptics, floor polish, ink, purses, folding doors, tennis balls and rackets, digital clocks, loudspeakers, bubble gum, drinking cups, guitar strings, mascara,ice chests, telephones, life jackets, bicycle tires, vacuum bottles, shower doors, and many other products.

When syn-fuels and hydrogen become profitable, the oil companies will be right there producing same. In the meantime, we need to working on clean drilling, increasing refining capacity, and conservation. among other actions. There has not been a refinery built in the US since 1976, due to expensive environmental regs.

We are now importing not just oil, but refined gasoline, since we can't refine enough to serve ourselves. This is a huge risk, we are in desparate need of refining capacity.



posted on Apr, 1 2004 @ 02:26 PM
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Originally posted by kricket
There has not been a refinery built in the US since 1976, due to expensive environmental regs.

We are now importing not just oil, but refined gasoline, since we can't refine enough to serve ourselves. This is a huge risk, we are in desparate need of refining capacity.



Excellent observation! You could have a whole story on that fact. Notice the two fires in Houston refinery in the last two days. If you lost one of those, it wouldn't matter if Iraq gave away free oil. We would be short on gasoline in the U.S.



posted on Apr, 1 2004 @ 02:45 PM
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Excellent article, it spelled out the issue clearly and left the politics at home - my compliments dbates



posted on Apr, 1 2004 @ 04:13 PM
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Awesome stuff dbates... this is great.


And I'm not even a big follower of oil topics... but, this is different
Great stuff.

[Edited on 1-4-2004 by Shugo]



posted on Apr, 1 2004 @ 04:26 PM
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All these graphs and statements are just like the "Limits to Growth," hypothesis from the Club of Rome, last time they had a phoney gas crisis in the early 1970s. Obviously the Oil mega conglomerate wants to raise oil prices, yet it underestimates great sources of oil in Alaska and in the Falkland Islands area.

All of a sudden estimates of reserves are down, and how do we know this "Peak Oil," thing is just another price gouging scheme anyway?

I'd be happy to buy a permanent magnet motor and start living without an electric bill, while driving an electric automobile with such an engine.

Link

See also:

Link

**edited to correct link**

[Edited on 1-4-2004 by Banshee]



posted on Apr, 2 2004 @ 12:20 AM
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Good research. Althou i highly doubt that making nuclear reactors the main source of power for the world, will make things better, we already have problems with the nuclear waste we have now. What we need is to follow in the footsteps of Tesla.

He revolutionized the world by introducing AC, AC induction motors, he also discovered the rotating magnetic field, among other discoveries and inventions, which is the basis for all devices that use AC.

Many of his inventions were stolen by others, among them Edison which was known to steal concepts and ideas from his employees. Tesla worked for Edison for sometime, until he realized what was happening.

Tesla was the first person, in known history, to come up with the concept of wireless electricity. Tesla asserted that by using wireless power, it was possible to run all of the Earth's industries.

I do think that his research should be continued. But as long as we have people in power that want to be in control and want to be the wealthiest men/women on Earth, this will be impossible.

I would suggest to people to start looking for alternative forms of power. Solar power is a good start.



posted on Apr, 2 2004 @ 01:11 AM
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dbates: great work! The topic is urgently important, especially in the US.

As a corollary, I posted the topic as "Peak Oil," which is not as well-done as your thread but does cover some major points.

It's very good to see the subject considered and researched realistically.



posted on Apr, 5 2004 @ 02:56 PM
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Fixed energy plants will be able to provide enough raw energy for industrial production.

However, for transportation there is no substitute for liquid hydrocarbons, because nothing has the same energy density except nuclear fuels, and they are far too dangerous to use in millions of mobile vehicles.

The price of oil will continue to rise.

As a strategic point of view we can spend lots of money to promote complex expensive things like oil sands, or we can start reducing consumption now.

The US public is mystified at the high gasoline prices. Maybe it has to do with 10 years of buying ridiculous huge trucks and SUV's?

This time it is NOT OPEC. The increase in world oil price only would add about 10 to 15 cents per gallon over the last two years or so. This time it is refining capacity, and there the problem is excessive demand due to too much driving of large vehicles.

Now the gasoline price goes up, but people aren't going to trade in their Hummer or huge Escalade they paid $50,000 for. They'll just bitch.

Here it is the SUV drivers who really made it bad for everybody since there is fixed refining capacity---with a more normal vehicle mix, the supply would be larger than demand, and both they and the people who were more reasonable would be paying less per gallon and less overall.

My fixes:

1) eliminate the difference between "trucks" and "cars" in the fuel efficiency standards.

2) gas guzzler tax starts at 16 mpg.

3) promote high mileage midsize normal cars and trucks, not extending the mileage of a 35 mpg econobox to 50 mpg.

4) insist that manual shift instruction be essential to learning, and *renewing*, drivers licenses so in the future people will buy manual higher mileage cars.



posted on Apr, 7 2004 @ 11:55 PM
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It is important to realize that the discovery of fossil fuels, the greatest energy subsidy ever known enabled the transformation of civilization itself into a form never before seen: industrialism.

Growing economies are unsustainable.

No other fuel source has such a high Energy Return on Energy Invested ratio (EROEI) as fossil fuels. Our society has been built on this fuel source.

There is no equivalent energy replacement.

"There really aren't any good energy solutions for bridges, to buy some time, from oil and gas to the alternatives.�The only alternative right now is to shrink our economies."�Bush energy advisor, Matthew Simmons, May 2003

How we best manage the decline of our economies and societies to become simpler and less complex is the key issue we face.


www.newsgateway.ca...



posted on Apr, 8 2004 @ 12:35 AM
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Using Solar and Hydro-Electric (Renewable) hydrogen-from water technology should ease the dependence on fossil fuels as it is NOW possible to store hydrogen fairly safely in non liqued states. This allows the non-transportation uses of fossil fuels to continue while substitutes are introduced over time. Hydrogen can be burned directly or as a feul enhancing additive in most non-diesel engine applications today. What's the big deal? Bio-feul use combined with ULEV technology can also help ease the transition to to the non-internal combustion era. It's nowhere near as hard as it looks. Probably create quite a few jobs and new opportunities here(and abroad). Why do we refuse to understand or believe this is a fairly easy and painless thing to do? Oh yeah, Big Oil weilds so much power we are now involved in an oilfeild war..That's probably why. That's a lot of power. Maybe too much?


[Edited on 8-4-2004 by KnotI]



posted on Apr, 8 2004 @ 12:51 AM
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Originally posted by vista
It is important to realize that the discovery of fossil fuels, the greatest energy subsidy ever known enabled the transformation of civilization itself into a form never before seen: industrialism.

Growing economies are unsustainable.

No other fuel source has such a high Energy Return on Energy Invested ratio (EROEI) as fossil fuels. Our society has been built on this fuel source.

There is no equivalent energy replacement.

"There really aren't any good energy solutions for bridges, to buy some time, from oil and gas to the alternatives.�The only alternative right now is to shrink our economies."�Bush energy advisor, Matthew Simmons, May 2003 (Oil Patch Public Relations Representative)

How we best manage the decline of our economies and societies to become simpler and less complex is the key issue we face.


www.newsgateway.ca...


Uhhh..yeah , sure....Oil is power at this time in World History, period.



[Edited on 8-4-2004 by KnotI]

[Edited on 8-4-2004 by KnotI]



posted on Apr, 8 2004 @ 07:23 AM
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Fuels cells for automobiles are not as viable as the promoters would like us to think. If by a miracle, these cells were viable and the millions of cars and trucks could be retrofitted for fuel cells, where would the energy come from to fill these?

In Ontario we are facing an energy/electricity crisis in our own neighbourhood. An Energy Task Force Report weakly suggested, "...the use of off-peak power to produce hydrogen for use in fuel cells...� In other words, they had no answer.

An entire hydrogen energy infrastructure would require investments of large amounts of money and energy. It is decades away.

Most importantly, the process of hydrogen production always uses more energy than the resulting hydrogen will yield.

As well, where will the petroleum products come from to build and maintain roads? Asphalt incorporates large quantities of oil. Airlines use copious amounts high-grade kerosene refined from oil. Transportation will change dramatically.

Europe is much further ahead as their cities were designed around mass transportation. Unfortunately, North America built it's infrastructure around the car and truck.

But this isn't just about heating homes, driving cars or electricity for manufacturing.

Petro-chemical products touch every aspect of our lives - the car we drive (gasoline, interior mouldings, exterior coatings), clothing, stereo and computer housing, paint on the walls of our houses and offices, the plastic packaging used for food, the transportation of imported food (produce etc),�the shampoo bottle in the shower, pharmaceuticals. The list is endless.

These chemicals will become scarce and expensive.

Unfortunately, our lives are so intertwined with the use of fossil fuels that to remove these from life's equation leaves us with an unpleasant result.

"It is evident that the fortunes of the world's human population, for better or for worse, are inextricably interrelated with the use that is made of energy resources."
M. King Hubbert



posted on Aug, 6 2004 @ 10:42 AM
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US Net Imports of Crude averaged 8.1 million bpd in 1997, 9.1 in 2002 and 9.6 in 2003.

US production averaged 6.4 million bpd in 1997, and was constant at 5.8 in 2002 and in 2003.

The U.S. imported a record 11.3 million barrels of crude oil a day in the week ended July 23, and yet according to the DOE the US production for that week was still as high as 5.4 million bpd.

In July 2003 the average was 9.75 Million bpd
www.eia.doe.gov...

Nobody seems interested to know the reason for this UNPRECEDENTED rise of almost 1.5 billion bpd ... (statistics explain it as "refineries processing more oil", role of the strategic petroleum reserve was insignificant, at 0.057 million bpd a day).

The conclusion is obvious : the DOE is hiding the dramatic decrease in the US production taking place NOW - as it was explained long ago here

www.abovetopsecret.com...




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