Thank you all for coming out tonight. The topic that we will be exploring together this evening is I trust worth your attention away from the hockey game. I believe it’s one of the most important things we could possibly be talking about at this moment in our history and I’ll try to lay out for you my reasons for thinking so. For a number of years I’ve taught a course that could be called human ecology at New College of California in Santa Rosa and in doing so I’ve been fascinated by the role of energy in ecosystems and in human societies and one of the things that fascinated me in teaching this course was the remarkable phenomenon in human population growth of the last two hundred years. If we were to see this in any other species we would say this is a classic bloom – population bloom – event and of course in most ecosystems population blooms are usually followed by crashes and die offs. Always they’re fueled, literally, by some energy source from the environment that enables a particular species to proliferate wildly. Well what was going on in this case?
Clearly the population explosion has coincided with the industrial revolution, but what’s the industrial revolution all about? Well, of course, it’s about technology. Human beings have invented all sorts of new gadgets over the last couple of hundred years that’s made our lives easier. But that doesn’t really explain the situation. Fundamentally we have to be getting a lot more food or we wouldn’t be able to support such a dramatic increase in population. There were fewer than a billion of us in 1800 and by 1930 there were 2 billion. Now that’s a 100% increase in population in 130 years – extraordinary. But by the 1960’s there were 3 billion, by the late 70’s, 4 billion, by the late 80’s 5, by the late nineties, 6 billion. Obviously, something extraordinary is going on here.
Well, as I said it has to have something to do with food production. Well, what’s happened in food production? One of the things is that we have replaced animal power with the work of machines. This is a graph of work done over time in the U.S. – sorry about the U.S. orientation here, it’s just a slide I happen to have, and stacked representation of work done over time in the U.S. by humans, domesticated animals, and machines. As you’ll see in 1850 the muscle power of domesticated animals was responsible for 66% of all the energy in the U.S. economy and human labor was responsible for another 15% or so and much of that human labor, of course, was human muscle power of kidnapped Africans and only about 17% was fuel and that was of course almost entirely wood, an exhaustible, but nevertheless at least theoretically renewable source. As that resource was drawn down it was gradually replaced by coal first and then starting in the 1860’s with petroleum. But see what happens over time – the contribution of human muscle power and animal muscle power trails off to practically zero. This is what the industrial revolution is really all about. It’s the replacement of traditional energy sources, primarily muscle power, with the work of fuels, and overwhelmingly, fossil fuels.
Now it’s not that we don’t have people working in the economy anymore, it’s that the amount of work done by machines running on fossil fuels produces so vastly much more power that the amount of power developed by animals and human beings is now just a negligible part of the economy – it’s not even – it doesn’t even show up on the graph. This graph shows us – the dotted line down here is the amount of renewable energy in, again, the U.S. economy over time from 1850 up to approximately the present and then non-renewable energy in the economy and as you can see, strange thing, the renewable energy in the U.S. economy, the amount of energy from renewable sources has remained fairly constant from 1850 all the way up to the present. It’s the immense growth in energy usage that’s occurred has been almost entirely in the form of non-renewable energy resources and this has an effect on people’s way of life. This is an international comparison of total energy use per person and real per capita gross domestic product. So we see people, for example, down here in India, Kenya, Egypt use very little energy per capita but they also have a very low standard of living – the two things seem to be somewhat correlated. U.S.A of course – we’re number one – hey - we use the most energy in the world, we have the highest GDP. Canada is close behind here of course but what’s interesting is that it’s not an ironclad relationship between per capita GDP and per capita energy use, it’s kind of an elastic relationship, because look at a country like Sweden. Its using energy at a rate of about half the rate Americans use it per capita and yet the standard of living is very high. In fact if you travel in Sweden you would wonder why anyone would want to live in the U.S., but that’s another topic.
The most significant source of energy that we have developed over the past couple of hundred years has been petroleum. Why? Because it’s a highly concentrated energy source and it’s cheap and it’s been very abundant. Basically nature provided this stuff in the ground millions of years ago – all we have to do is stick in a pipe, and in many cases it’s even under pressure and it just flows up to the surface – all you have to do is put it in pipelines and tankers, take it to a refinery and process it in a way that really is remarkably simple and cheap and you have all sorts of products – gasoline, diesel fuel, fuel oil, materials for plastics and on and on and on.
The U.S., of course, benefited hugely from this resource. The U.S. was the Saudi Arabia of the early twentieth century. The U.S. was the world’s largest oil producer, even the world’s largest oil exporter, in the latter part of the nineteenth and the early part of the twentieth centuries. More oil wells have been sunk in the lower forty-eight of the U.S. than in the rest of the world combined. So this tells us something. Whatever happens in the U.S. is the precursor for what is bound to happen in the rest of the world as far as oil is concerned.
What has happened in the U.S.? What can we say? Well, we don’t see it on this graph but actually oil discovery in the U.S. peaked in the 1930’s with huge discoveries in East Texas, Oklahoma, places like that. Then about 40 years later oil production in the U.S. peaked. That came as a surprise to many people, not to a certain petroleum geologist named M. King Hubbert who had predicted the U.S. production peak. He understood that production from a given oil reservoir tends to follow sort of a bell-shaped curve. Why? Because it takes a while to map out the reservoir and begin to exploit it and when about half of the oil is gone it becomes more and more difficult to pump out the other half and so there’s just this natural bell-shaped production curve. This is what it looks like for the U.S. It’s not a perfect bell-shaped curve because of course you have discoveries in Alaska happening over here and non-conventional deep-water petroleum resources coming on-line here. But certainly U.S. is way past its production peak. And that has had immense geo-political and economic implications because since that peak in 1970 the U.S. has had to import more and more of its oil. It’s importing 60% of its oil now. After the 1973 oil embargo when oil was used as a weapon against the U.S. by Middle Eastern countries and did great damage to the U.S. economy the U.S. has tried therefore to import as much of its oil as possible from non Middle Eastern OPEC countries including of course Mexico and Canada.
There’s something else that happens with oil depletion. It’s kind of a double-whammy because once you pass that depletion curve first of all it’s difficult to extract oil at the same rate as prior to the peak but also because you draw off the easy stuff first, the stuff that’s easiest to get out of the ground, the best quality stuff first. Whatever is left tends to be of less quality and requires more energy to get it out and process it. So there’s an energy profit ratio for petroleum - that every form of energy requires energy to get it. You have to spend energy in exploration and drilling in order to get the oil. With oil traditionally that energy profit ratio has been very high but it’s variable and within the U.S. the energy profit ratio for domestic petroleum has been on a relentless downward curve Once again, remember, what we see in the U.S. now is what will inevitably happen in the rest of the world, as the rest of the world catches up.
The question always is: How much oil is there? Here is a set of 65 published estimates of global ultimately recoverable oil. What ultimately recoverable means is that’s how much nature put there to begin with. We have to know how much was put there to begin with in order to know when we reach that magic halfway point where the production peak is likely to occur. So these are estimates that have been given by various scientists starting in the 1940’s going all the way up to the present and as you see they kind of converge on around 2 trillion barrels. That’s a huge amount and we’ve used about 900 billion barrels so far, so that means there’s over a trillion barrels of oil left in the ground. Again, that’s a huge amount but we are pushing up very close to that halfway mark.
Many people make a mistake when talking about oil production in thinking that it’s sort of like the gas tank of a car. You know when you fill up the gas tank? The car runs just fine when it’s half empty, the car runs just fine when you only have one-eighth of a tank left if you don’t bother to look at the needle on the gas gauge - there’s no problem, the car still runs just fine. It’s just when it actually runs out that you notice that there’s anything wrong. That’s not the way oil production works. One could say we have a trillion barrels of oil left in the ground. How fast are we using it? Well at about 25 billion barrels a year. Just divide one trillion by 25 billion you get 40. So we have 40 years of oil left. No problem – we’ll leave that for the next generation to solve.
But that’s not how it works. We won’t just keep going in the car until the gas tank is empty as if we could continue to produce that oil at the same rate until literally it’s just all gone one day. No – the production profile will once again reach a kind of inevitable peak and how do we know when we’re getting close to that peak? Here’s once again a picture of global oil discoveries, and by the way this particular graph comes from the vice-president of Exxon-Mobil in an article he published in a trade journal just a couple of months ago. It clearly shows oil discovery peaking in the early 1960’s. So we’re discovering less and less oil with each passing year and in fact at this point we’re discovering about 1 barrel of oil for every 3 or 4 that’s pumped and burned. Clearly if we keep going at that rate a production peak is inevitable at some point. This is basically the same graph just sort of smoothed out and comes from another petroleum geologist: Colin Campbell, who’s an expert on petroleum depletion. Here again you can see the peak in discoveries occurring several decades ago. The classic bell shaped curve is something we typically don’t see because the production in the real world is constrained by other factors – economics, political events, and so on. But this is where we are right now.
In addition to what we might call conventional oil the stuff that you pump out of the ground there are unconventional resources – heavy oil, deepwater, polar, tar sands from Alberta and so on and these are making up a larger and larger proportion of the total oil being produced. But see this flat plateau area that we’ve been in since 1973. During that time of course the world population has grown from about 4 billion to about 6 billion, to over 6 billion, so what’s actually happened during this period is that energy usage or energy availability per capita in the world has actually gone down. That’s as a result of a number of economic and other factors including increases in efficiency but certainly not all of it is due to that. This is an important graph right here because it shows us where the remaining resources are. Yes, there’s oil all over the world, there’s North Sea oil, there’s oil in the South China Sea, there’s oil still in Canada, the U.S., and Mexico, former Soviet Union, Africa, South and Central America but look at the proportion of the remaining oil reserves that are in the Middle East and one wonders why then there’s so much geo-political interest in that part of the world right now.
Very quickly here – what about alternatives? I’m a huge renewables advocate – I have photovoltaic panels on the roof of my house, I drive a car that runs on bio-diesel that’s made from vegetable oil and so on, but realistically are we prepared for this oil production peak? This is our energy situation right now, say in the U.S. a big industrialized country – renewable energy makes up seven percent of the energy pie, and of that seven percent the vast majority is wood and waste and hydropower. Solar photovoltaics and wind each make up 1% of that 7% piece of the pie, a tiny fraction of one percent.
We are not ready for the global peak in oil production, which is likely to occur sometime between 2004 and 2010. Natural gas situation is, if anything, even more dire. Natural gas, again, this is from Exxon-Mobil, natural gas demand is increasing more natural gas electric generation plants being built in the States and so on. But natural gas discovery has already peaked. The typical natural gas well in the U.S. is 60% depleted within the first year. That means the industry is running at breakneck speed just to stay even with demand. U.S. natural gas well productivity going down, U.S. imports of natural gas are therefore increasing. This shows 15.4% in 2000, now it’s well up past 16% and where is that natural gas coming from? One guess – Canada. This just shows where the U.S. is getting it’s natural gas from currently. Now why is natural gas important? Well we use it for home heating – we also use it for making fertilizer and it’s important also for many, many other industrial processes. We’re looking at natural gas shortages probably beginning within the next few months and continuing over the foreseeable future over the next few years. If this isn’t a wake-up call I don’t know what is. We have listened to the siren song of the economists. The economists, petroleum economists, tend to be optimists because it’s possible with a stroke of a pen to increase reserves or to take something from one category as was done in Canada last year – taking the oil sands from one category and putting them in petroleum reserves as though they can be produced as easily and cheaply as the liquid stuff in Saudi Arabia, for example, which simply is not true. But with the stroke of a pen the economist sees oil reserves increasing and says there’s no problem. It’s the oil petroleum geologists who are the pessimists who are sounding the warning cry. And these are the people I think we need to be listening to because they are the ones who know the actual physical constraints on the resource.
So what does a modern industrial society do? Here we have created a way of life that is deeply imbedded in, dependent on, non-renewable resources and we have politicians who are incapable of telling us the bad news that the resources are running out. Why? Because that bad news is a sure ticket to defeat in the next election. The classic statement is look what happened to Jimmy Carter. Jimmy Carter was telling us back in the 1970’s put on your cardigan sweater and turn down the thermostat, conserve, put up solar panels on the White House roof and of course in 1980 he was turfed out of the White House by Ronald Reagan who said “It’s morning in America” – isn’t that a nice message? Tore the solar panels off the White House roof in a symbolic act and there we have been ever since, basically, no one being willing to step up and say – this is the situation that we’re in.
What are the alternatives? We’re being told now for example that the hydrogen economy will save us from the economic problems arising from oil depletion. We’ll just switch the car fleets over to hydrogen. Unfortunately I don’t think most of the people who are proposing this have really thought it through very well. Because hydrogen is first of all not an energy source – it’s just an energy storage medium – it’s like a better battery if you will, and in some cases may not even be a better battery. There are no hydrogen reserves under the surface of the earth we can tap – you have to make hydrogen. Most commercially made hydrogen now is made from natural gas which we’ve already seen is itself about to become scarce. It’s possible to make hydrogen from electrolysis from water but it takes more energy in the form of electricity to disassociate the hydrogen from oxygen than you’ll get back when you send the hydrogen through your fuel cell. So it may be convenient as a way of storing energy and making it useful in electronic devices or perhaps for transportation but it’s not an energy source, it’s not a primary form of energy that we can rely upon. So what do we have for that? Nuclear, hydropower, coal, solar, wind, geothermal – all the things we’ve been hearing about for decades, nothing really terribly new here.
As I was showing earlier with the pie graph, we have not invested sufficiently in renewable alternatives to be able to make the transition in anything like an easy step down fashion, because it takes decades to transform the energy infrastructure of a society - you can’t do it overnight. But that’s what the economists are expecting us to do. They’re saying, well, wait for the price signal - the market will take care of it. When oil starts to become expensive then that will make photovoltaics more attractive. Yes, but in order to make that transition we need something like thirty or forty years of lead time and we need to be investing the remaining fossil fuels in making that transition otherwise we’re in for a rude, rude awakening. Fundamentally, it’s possible, it’s theoretically possible that tomorrow someone could come up with a free energy device or perfect nuclear fusion and there’d be plenty of energy. But even with those sort of technological miracles again we would need huge amounts of investment and lead-time. So we should be investing more now in any case in the energy transition but it’s overwhelmingly likely I would argue that there is no techno-fix. And that the only real solution is going to be redesigning our industrial societies to operate on less energy and that means a fundamental change in our way of life and in order to accomplish that we’re going to need real political leadership to tell us the situation we’re in and galvanize the public to make the kinds of choices, and in some cases, sacrifices, that will be necessary if our children and grandchildren are going to live in anything like a survivable world.
Transcribed by Rodney James
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