Bullet Points: Averting a Liquid Fuel Crisis From Peak Oil
AVERTING A LIQUID FUEL CRISIS FROM PEAK OIL
Robert Hirsch (Energy Advisor); Congressman Roscoe Bartlett (R-MD)
- Oil is the life-blood of modern civilization. Virtually everything that we consume comes to us by carriers that cannot operate without liquid fuels. World commerce is critically dependent on abundant and reasonably priced oil
- World oil production is at or near maximum for the first time ever
- While the current worldwide economic crisis has had a modest impact on world oil consumption, the impact has not been dramatic
- When oil production decline begins, oil shortages will develop and increase each year until mitigation takes hold 10-20 years later. Oil prices will escalate dramatically and economic damage will increase
- Production from every oil field goes through phases of growth, maximum, and decline; these phases are fundamental and strongly associated with the fact that oil is a finite, depleting resource
- Oil production from countries goes through the same phases. Today, 55 of the world’s 65 largest oil-producing countries are past their production peaks and in decline
- As a result, after more than a century of world oil production generally rising to feed economic expansion, production has entered an unprecedented plateau period, as seen in Figure 1with only a 4% fluctuation band since 2004
- Many prominent organizations and individuals believe that world oil production has or will soon be inadequate. They include:
- IEA, Chevron, Shell Oil, Total Oil, Statoil, Hess Oil, Toyota, Volvo Trucks, the Corp of Engineers, CIBC (Canada), EWG (Germany), Jim Schlesinger, Boone Pickens, Matthew Simmons, and many retired oil company geologists
- The few organizations that believe that there is no near-term oil supply problem include OPEC, Exxon, BP, and EIA
- Mitigation of declining world oil production will be possible but it will be extremely expensive and represent a massive undertaking
- We should invest in more efficient light-duty vehicles; enhanced oil recovery, heavy oil, and oil sands; and coal-to-liquids. We also need to conserve and ration. And, though rationing could happen quickly, it would be extremely complex to administer and also very painful for fuel users
- Mitigation options that save or produce liquid fuels will be a problem for decades, because of the long lifetimes of the world’s huge fleets of liquid fuel- consuming cars, trucks, airplanes, ships, and other vehicles
- Electric power options produce electricity, which will be of value in mitigating oil shortages until existing fleets are replaced to run on electric power. Such energy switching is possible in some cases but not in others
- An analysis for the Department of Energy (DOE) considered the potential impact of a worldwide crash program to combat declining liquid fuels supply
The conclusions were:
- At likely oil production decline rates, the problem runs away from our best mitigation efforts for well over a decade
- The related economic impacts will be severe and increase year after year until mitigations take hold
- The impacts on world Gross Domestic Product (GDP) are likely to be roughly proportional to the annual decline rate of oil supply, which means deepening recession for more than a decade.
The important take-away points are as follows:
- The decline of world oil production is unavoidable, and it could begin in a matter of a few years
- The problem will be one of liquid fuels, not energy
- Many mitigation options are available and will be needed
- Deployment of technologies will be critical, massive, time-consuming, and extremely expensive
- Growing economic hardship will occur worldwide for more than a decade, because there will be no quick fixes
- While there will be great pain for many, there will also be opportunities for those who seize them
In conclusion, Congressman Roscoe Bartlett stated:
With the US being one person in twenty-two of the world’s population, with 2% of the known oil reserves, it actually uses 25% of the world’s entire supply of oil and imports two-thirds of its oil
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