Debunking the Peak Oil Debunkers

Reposted from EV World

Peak oil is a fact, not a theory.

From US conventional oil production peaking in 1970 to global conventional oil production peaking in 2006 the figures are indisputable. Even institutions such as the International Energy Agency (IEA) and publications like The Economist that are not known for alarmism have admitted that oil production from conventional sources has peaked.

So why are there still commentators who refuse to believe peak oil?

Similar to the phony global warming “debate,” many, but not all of the most vocal deniers are politically conservative, pro-business. And, by their refusal to take into account basic statistics, they’re anti-science. In terms of reduced energy use per capita, and the inevitable downsizing of the global economy, deniers are ideologically opposed to what happens now that we’re living in a post-peak world.

So what are their arguments, and why are they so wrong? The top seven are listed below:

1. Peak oilers say oil is running out, it’s not

At best this is a misunderstanding; at worst it’s a straw-man fabricated to cast doubt on the assertions of those concerned with the realities of peak oil.

No peak oiler worth their salt has ever argued that we’re running out of oil. Sure, there may have been a couple of fringe bloggers arguing the case alongside conspiracy theories about alien abduction cover-ups and laser guided death unicorns, but no one takes them seriously.

The issue isn’t when oil will run out. It’s about when conventional oil extraction peaks, which happened in 2006 according to the IEA’s 2010 World Energy Outlook. Unconventional oil has filled the gap for now (along with decreased use), but there’s much skepticism as to how long this can last.

2. Fracking will save us from peak oil

While it’s certainly true that the massive increase in hydraulic fracturing of natural gas was largely unforeseen by the peak oil-aware, it’s merely a game extender, not a game changer.

The small amount of oil that arises as a byproduct of fracking accounted for less than 5 percent of daily US consumption last year. This is even after a 750 percent increase in tight oil production since 2003. Clearly there would need to be an unprecedented increase in exploration and drilling for oil from fracking to even begin making a dent in the wider scale of things. But that’s before we consider damage to the environmental commons — land, air, and water — from the fracking process.

The other trouble with fracking is that production figures for individual wells commonly decline 60-80 percent in the first year followed by a more gradual decline. This means new wells must constantly be drilled to avoid production for a whole area dropping off very quickly.

The US Energy Information Administration (EIA) forecasts that domestic production of tight oil will max out at 1,325,000 barrels a day by 2030. This is only 7 percent of the current US daily consumption. No one seriously believes that the US economycan grow without increasing oil consumption. The numbers don’t stack up, it’s as simple as that.

3. The US is now, or will soon be, a net oil exporter

The rise of tight oil extracted through fracking has been hailed as a new era for US energy independence. Some have even gone as far as saying that the US is now a “net oil exporter.” The devil is in the details however. On a Btu basis the US imported 58 percent of the oil it consumed in 2011.

Now, it’s true that the US became a net “oil product” exporter in 2011 for the first time in over sixty years. This is, however, very different from being a net oil exporter proper.

Gasoline, diesel, and heating oil made up the majority of these products. But much of this oil was initially imported as crude from overseas, refined in the US and then exported back out. This doesn’t make the US a net oil exporter.

Total net crude and product imports did fall 11 percent in 2011 to 8.436 million barrels a day, the lowest point since 2005. And domestic oil output did rise 3.6 percent to 5.673 million barrels a day. But this still leaves a 48.7% difference between imports and domestic oil output, a huge gap that the IEA forecasts will not be closed as far out as 2035. Observant analysts don’t think it will happen ever.

4. Oil production is still increasing annually

Like many peak oil denier myths this old gem is true up to a point. But only if you include unconventional oil, natural gas liquids, and biofuels. Which means that when you take those figures away you get…that’s right…a peak in the production of oil from conventional sources.

And as we see from the example in the US, it’s highly unlikely that unconventional plays will be able to take up much of the slack.

5. Saudia Arabia will ramp up production to ease prices soon

Uh, no.

Crude oil prices have been over US $100 a barrel since February 2011. This is after steadily climbing from a low of US $42 a barrel in December 2008, after the last recession killed demand.

The question is, With oil prices so high for so long, why hasn’t Saudi Arabia stepped in already to ease prices?

Saudi Arabia produced the highest amount in thirty years in November 2011 and then actually decreased output and exports the following month. The increased November output dropped prices by $3.00 per barrel to $107.97 for December 2011. The easing was short lived however, with average March 2012 prices sitting at $126.4 per barrel, the highest price since July 2008.

Production capacity figures for OPEC countries are notorious for being inflated and there’s increasing skepticism that Saudi Arabia couldn’t produce any more oil even if it wanted to.

6. East Africa is the new Middle East

Madagascar has been targeted by Exxon and Norway’s Statoil since 2005. Statoil found a billion barrels of oil equivalent. That may seem like a huge find but consider these points. First, world oil consumption is about 80 million barrels a day, give or take, making it the equivalent of about 12 days of oil.

Then compare the Madagascar finding to the largest conventional oil field in the world, Ghawar, in Saudi Arabia. It’s extracted 65 billion barrels of oil since 1951 from initial reserves of over 100 billion barrels. The Madagascar field extends down to Mozambique where Anadarko have found 1.3 billion barrels of oil. Further inland Tallow has found 1 billion barrels of proven reserves in the Ugandan Albert basin. Plenty of other African countries are now being explored by a number of interests but they have yet to show any major finds.

Oil pundits might be saying “game on” but really all there is to show is a lot of wishful thinking which, at the end of the day, won’t fill the gas tank. I should know, I tried that plenty of times in my student days.

The truth is that most of the new oil finds throughout the world are less than 2 billion barrels each. The global annual consumption is currently a little less than 33 billion barrels per year. There is a huge disconnect between the size of the fields currently being discovered and the predicted future demand for oil.

7. There’s always a new frontier

The question is, Why do we need new frontiers if oil production isn’t peaking?

It’s an odd concept that oil companies would spend millions of dollars in politically unstable countries and areas where the physical barriers are immense — such as the Arctic — just for the hell of it.

The truth is the low hanging fruit has been picked. All the easy to access oil has been found and developed. What we’re seeing now is increased exploration in increasingly economically dubious areas such as the Canadian tar sands, deepwater drilling, and fracking and horizontal drilling in tight oil plays.

It ‘s as if the pundits pushing this line have never seen a globe before. The world is round. There is a finite amount of land and ocean that can realistically be developed to economically extract and refine oil. From all the evidence collated over the last few years it appears that we’re pushing up against these limits right now.

The biggest oil find since the 1960s, the Kashagan oilfield in the Caspian Sea, has 13 billion barrels of proven reserves. Development of the field has, however, been plagued with funding problems after Shell shut its Caspian office in May last year. At this stage it’s unlikely this field will produce anything close to the original estimates due to ongoing delays with development.

After denial, acceptance

You have to give the deniers credit for being so tenacious about drumming up new magical thinking on how to outsmart Mother Nature. But in the end, their denial, especially as the lackeys of industry with their plutocratic ties to government, puts us at risk in terms of smart transitions to other ways to live and do business.

At some point, the “peak oil debate” needs to go the way of the phony “global warming debate.” Into the dustbin of history, where it belongs, so the rest of us can get on with civilization 2.0.

Andrew McKay writes Southern Limits, a blog on resource limits, energy, environment, peak oil and peak everything from a New Zealand perspective.

THIS IS IMPORTANT READ IT!

Reposted from Planet Thoughts The future of nuclear power now hangs on a single decision by President Obama---and us. His Office of Management and Budget could cave to the unsustainable demands of reactor builders who cannot handle the standard terms of a loan agreement. Or he could defend basic financial procedures and stand up for the future of the American economy. You can help make this decision, which will come soon. It's about a proposed $8.33 billion nuke power loan guarantee package for two reactors being built at Georgia's Vogtle. Obama anointed it last year for the Southern Company, parent to Georgia Power. Two other reactors sporadically operate there. Southern just ravaged the new construction side of the site, stripping virtually all vegetation. It's also stripped Georgia ratepayers of ever-more millions of dollars, soon to become billions. This project is in the Peach State for its law forcing the public to pay for reactor construction in advance. When the project fails, or the reactors melt, the public still must pay. A taste of what's coming has emerged in shocking defects in poured concrete at the site which will cost millions to correct and months of delay on a project whose construction has barely begun ( http://nukefree.org/nc-warn-vogtle-already-hit-major-design-flaw-delay ) . Nonetheless, Southern runs virtually no financial risk. It actually has an interest in never finishing. Florida is now in turmoil, trying to rid itself of a similar Construction Work in Progress law ( http://nukefree.org/florida-legislators-sue-stop-nuke-bailouts-advance ). Worldwide estimated reactor costs have jumped from $3-5 billion each a few short years ago to $10 billion or more, and rising. Uranium prices are set to soar as the supply of Russian weapons-based fuel is about done. And renewables have long since outstripped atomic energy as being cheaper, faster to build, cleaner, safer, more reliable and open to community ownership. There are virtually no private investors willing to back new reactor construction. There are no private insurers willing to take the risk on operating reactors. There is no place to store the radioactive wastes they generate. Operating reactors in Vermont ( http://nukefree.org/vermonters-tell-vermont-yankee-get-out ), New York, California ( http://nukefree.org/nrc-chair-jazcko-says-san-onofre-be-shut-indefinitely ) and elsewhere now face ferocious public uprisings to get them shut. They are being joined by Governors, US Senators and entire legislatures. Peter Shumlin, Governor of Vermont, has appeared at a major public rally to shut Yankee. The legislature long ago voted (26-4) the same way. Shumlin was joined by US Senator Bernie Sanders, who has issued a stunning denunciation of the loan guarantees ( http://nukefree.org/sen-bernie-sanders-ryan-alexander-stop-nuclear-subsidies ) . US Senator Ron Wyden of Orgeon has published a serious warning about the on-going dangers of Fukushima, which he recently visited ( http://nukefree.org/sen-wyden-warns-situation-fukushima-worse-believed ). Once the public kills one of these elderly reactors, a tsunami of shutdowns among the 104 currently licensed in the US will follow. Germany and much of the rest of Europe have abandoned the technology ( http://nukefree.org/europes-war-over-nuclear-financing ). Bulgaria has just scrapped plans for two proposed generators. Major banking institutions have warned potential investors in Britain's planned reactors that if they proceed, they will lose their financial standing. Mexico has also said it won't build new nukes. In Asia, only one of Japan's 54 licensed reactors now operates, and it may soon shut. Huge demonstrations and hunger strikes are raging against a proposed project at Koodankulam, India. The Philippines says it won't build any reactors at all ( http://nukefree.org/philippines-says-no-new-nukes ). China, the last bastion of any apparent large-scale interest in multiple nukes, seems to be wavering, in part because of the rise of a No Nukes movement there. Here, two reactors barely beginning construction in South Carolina are also in deep trouble. Their builders need massive rate hikes in North Carolina to proceed, and the opposition there is fierce ( http://nukefree.org/ncwarn-north-carolina-can-kill-south-carolina-nuke-project ). But the lynchpin is Vogtle. The construction loan guarantee program got $18.5 billion from George W. Bush in 2005. With the industry in deepening chaos, it took until last year for a president to designate less than half that money. For the first time in years, there is no Executive or Congressional request to put more money into the fund. The French National Utility EDF did step forward to get funding for Maryland's proposed Calvert Cliffs project. But haggling over terms contributed to its demise. Now Southern faces the same abyss. It refuses what the mortgage community would consider a normal 20% downpayment on its taxpayer-funded loan. Southern wants to put virtually none of its own money into the project, leaving the radioactive gamble totally to the public. But the Office of Management and Budget is apparently demanding something more reasonable ( http://nukefree.org/vogtle-loan-guarantee-not-yet-done-deal ). Because the OMB is a White House agency, Obama holds the key. It's our job to make him turn it in a green direction. A short while ago, this package was considered a done deal. But the GOP uproar over the failed $535 million loan to the solar company Solyndra changed to context. Initiated by Bush, Republicans have made Solyndra the poster child for bad federal loans. Vogtle involves some 15 times Solyndra's liability. And it's all Obama's. At least three petitions are circulating against the package.( http://nukefree.org/please-do-sign-petition-stop-new-nuke-loan-guarantees ). There are many ways to finally shut down what has been the most expensive technological failure in human history. Fukushima and the killing power of radiation, the unsolved problem of radioactive waste, the campaigns against failing reactors such as Vermont Yankee, Indian Point, San Onofre and Davis-Besse---all are key. This weekend, a conference convened by the Sierra Club in Washington, DC ( http://action.sierraclub.org/site/DocServer/no_Nukes_Flyer2.pdf?docID=9701 ), will weigh the various strategies. But killing this loan guarantee package could finally kill the prospect of new reactors in the US. The astonishing rise of Solartopian green technologies has far outstripped atomic energy in the marketplace. Every delay deeply diminishes the possibility of building more of these profoundly uneconomic anachronisms. In the long run, Vogtle, Summer and any other new nukes that seem to slip through in the short term will almost certainly be stopped by what has become one of the most powerful non-violent social movements in human history. But right now, it's up to Obama---and us. Does he really want an atomic Solyndra on his hands? Will we really let this happen? Let's relieve the President of this radioactive burden. Let's kill these reactors before they kill us, and take the most significant leap of all toward a green-powered Earth.

The Massacre Everyone Ignored: More Blood For Oil

(SOURCE: Exiled Online) With violence and government crackdowns making headlines from so many familiar parts of the world, there’s hardly been a peep in the media about the biggest and ugliest massacre of all: Last Friday in Kazakhstan, riot police slaughtered up 70 striking oil workers, wounding somewhere between 500 and 800, and arresting scores. Almost as soon as the massacre went down in the western regional city of Zhanaozen, the Kazakh authorities cut off access to twitter and cell phone coverage – effectively cutting the region off from the rest of the world, relegating the massacre into the small news wire print.

But not before someone was able to get a video out to YouTube last Friday, showing the moment when the striking oil workers rushed the barricades. They’ve had to have put up with inhuman, medieval abuse for months now, culminating with the murders a few months back of a striking oil worker and the 18-year-old-daughter of another union organizer, as well as the jailing of a labor lawyer working with the striking oil workers.

Keep in mind, the oil company whose workers are striking for better pay and union recognition, KazMunaiGaz, is “owned” by the billionaire son-in-law of Kazakhstan’s Western-backed president-for-life. Among Kazakhstan’s leading American partners are Chevron, whose website boasts, “Chevron is Kazakhstan’s largest private oil producer” – adding this bit of unintentional black humor:

“In Kazakhstan, as in any country where Chevron does business, we are a strong supporter of programs that help the country"

Reposted from Thurman's Notebook

Peak Oil: Is There Any Longer a Valid Debate?

Reposted from Oil be seeing you

It has been some time since I sat down to analyze what is happening with peak oil. It has been difficult to see that there is any meaningful response from government, business and the media. They are still very busy characterizing minor new discoveries of oil as the saviors of society, as though there is a pervasive fear of admitting the truth to the public. The pieces of the puzzle that one has to fit together are very fragmented and misrepresented in the media.

* There is a renewed effort in the US to paint the tar sands as an ethical source of oil. I still believe Chris Skrebowski is right in his projection that the tar sands will peak in 2015. I covered this in the article, Will the tar sands peak in 2015?, on my blog. The essential limiting factors on tar sands are flow rate (the amount that can be extracted at one time from all mines) and the density of hydrocarbons in the formation which tends to decrease toward the periphery of the formation. The latter is the basis for Skrebowski's 2015 peak projection.
* The US was putting a great deal of stock in shale gas as the future of energy for the US. With all of the environmental problems from fracking, the public is, even now, split on the validity of that as an energy source. In addition the IEA and USGS(EIA) have now downgraded the estimates for the Murcheson Shale formation in eastern US from over 400 trillion cubic feet to something less than 50 trillion cubic feet. There is also serious doubts about the validity of the estimates for the Bakken shale formation in north central US and southern prairie provinces of Canada. This is a tremendous blow to US energy plans. It is also very likely that estimates on recoverable energy from other shale formations, both in the US and abroad, have been dramatically overstated. At the same time the true cost of extraction and site restoration have probably been dramatically understated.
* It is strongly believed, in the peak oil community, and recently being tacitly admitted in the mainstream press and political circles, that the OPEC reserve estimates for Saudi Arabia, and potentially other OPEC members, are vastly overstated and that even Saudi Arabia has reached or surpassed its production peak. The Saudis are only managing to keep up their production with the injection of tremendous volumes of sea water to keep up the wellhead pressure. But they are now experiencing water cut up to as high as 90% on some wells. In the process they are also destroying their critical fresh water aquifers by contaminating them with salt water. In addition OPEC nations are increasingly consuming their own oil resources meaning as their standard of living rises and the disparity between production and exports is growing each year. From a global perspective it is not production that matters but rather exports.
* Emerging nations such as China and India are still experiencing exponential growth in their energy consumption every year. Both use a tremendous amount of coal as well (China has vast coal reserves but they are also a net coal importer), but coal reserves are significantly declining, with production rates now also on the decline. Energy consumption tends to follow economic growth and decline and there is still a tremendous amount of economic growth possible in these two large population giants. As is always the case, the more the economy grows the greater are the population's expectations for standard of living and consumption. This is certainly proving to be the case in these two nations.
* Deep water oil is not the panacea that western nations had painted it to be. The recovery of deep water oil is very technically challenging, expensive and risky, both in terms of safety and environmental well being. BP's Deepwater Horizon loss was the first major deepwater oil disaster, but it definitely will not be the last. There will always be a high risk of methane explosions and the resulting leak is extremely damaging to the environment. It is also very likely that the optimistic estimates of how much undiscovered deep water oil exists have been dramatically overstated. Deep water wells also tend to peak much more rapidly than land-based wells - vis-a-vis the North Sea and Mexico's Cantarell - so their benefit is short-lived. Considering the cost of exploration and discovery, the long lead time needed to put safe extraction technology in place, and the limits on the number of recovery wells that can be sunk into a single reserve, deep water oil is very unlikely to keep up with the declines in land-based production. It is very possible that deep water oil may quickly become non viable economically and have to be abandoned.
* Methane hydrates (as well as coal bed methane and bio-mass methane) are seen as a strong potential as the next great energy source. Certainly with the decline in viability of shale gas this will renew the expectations for methane hydrates. I have covered this extensively in my blog. The estimates for recoverability of Methane Hydrates are all over the map, as are the reserves that have a potential for economic recovery if the technology can be sorted out. In general, however, the recoverability estimates, I believe, are badly overstated. In addition it would take a whole new energy infrastructure to take full advantage of these resources, an energy infrastructure that I believe we are already past the point of possibility of developing.
* There is an ever growing disparity between WTI crude prices and the other, more realistic prices of oil such as Brent. The WTI, NYMEX-traded, American price is being kept artificially low as the US, the world's largest oil importer, attempts to impose prices on the rest of the world in order to keep it's ever increasing energy costs in check, particularly as it tries to recover from the 2008 global economic recession, which it still has not managed to do. Increasingly global oil producers will not trade their oil contracts on NYMEX because they are able to get much better prices on other global oil commodity exchanges which more accurately reflect the state of global oil reserves. With the US credit rating having recently been downgraded by S&P there is an increasing possibility that the US dollar will be overthrown as the global reserve currency. This will make the US/NYMEX oil pricing increasingly irrelevant and drive the cost the US must pay for oil up to realistic levels equivalent to what the rest of the world pays.
* Over the past several years there is a clear, but unprovable pattern, of the US waging war after war against oil-rich countries in the hands of rulers, usually dictators, not friendly to the U.S. First there was Iraq and Afghanistan (the gateway to the Caspian Sea oil province), then the suspected involvement in the overthrow of Mubarak in Egypt, the invasion of Libya, the suspected involvement in the division of Sudan, the continued saber rattling at Iran and Venezuela, and the increasing rhetoric, now that Libya is more or less settled, over Syria. After the invasion of Afghanistan a former executive of Conoco Phillips, Ahmid Karzai, was installed as ruler and plans immediately began for a pipeline to bring Caspian oil to a Pacific port via Afghanistan. After the invasion of Irag western oil companies immediately began negotiating for their share of the Iraqi oil pie. The same is about to happen in Libya. And when Sudan was partitioned the US took aim at the oil reserves in the newly separated south Sudan. The saber rattling over Iran, Syria and others has as much to do with their oil reserves as politics. And in all, the US has more military presence in the Arabian Gulf than anywhere else in the world except the US itself.
* Despite several years of teeth gnashing and negative press in the US over Canada's tar sands oil being dirty oil (complete with bans against it in several states including California), the US government has a measure on the table for building a high volume pipeline, the Keystone Pipeline, from Alberta to the major US oil refineries in Texas and elsewhere along the Gulf coast. It is obvious they only consider tar sands oil dirty when they can get adequate supply from elsewhere in the world. With the reality of declining OPEC, Mexican and other sources of oil staring them in the face, they desperately want to tie up that Canadian tar sands oil, particularly since China is making increasing investment in the tar sands also in an attempt to ensure future oil availability. Venezuela has vast oil sands, in the Orinoco region, that probably equal those in Canada, but Venezuela is not friendly to US interests.
* The US is quietly but increasingly reducing its investment in automobile infrastructure (highways, tunnels, bridges, etc) including new construction and maintenance of existing infrastructure. This is obviously partly due to the long recession that has gripped the country but it is a clear indicator that when budgets are tight they are no longer prepared to give top priority to automobile infrastructure.
* Most developed nations such as the US and European nations are placing increased emphasis on electric cars as the centerpiece of the future of the automobile. That, however, ignores the simple and glaringly obvious reality that electrical generation and transmission infrastructure is rapidly deteriorating and will require massive billions of dollars of investment in order to support an electric car culture. In addition, any sort of serious government push to accelerate the conversion to electric cars will dramatically increase the drawdown of increasingly rare resources, particularly for the production of the batteries needed to run those electric cars. It is clearly doubtful if the hundreds of millions of cars in the US and Europe will ever be replaced wholesale by electric vehicles.
* Increasingly over the past decade, published oil production and reserve figures have been broadened to include more and more questionable commodities such as synthetic oil from tar sands, liquid fuels created from coal and natural gas condensates, liquid fuels produced from shale formations, ethanol, bio-fuels and more. The simple reality already is that traditional crude oil is no longer satisfying the demand but is increasingly reliant on these other non-traditional sources to make up the shortfall. But even the figures reported by the EIA, of crude plus condensates, are already on the decline.

Peak oil is not an event wherein all of a sudden one day governments, business and the media will announce that peak oil has arrived and we all need to adjust the way we live on this planet. It won't be sudden. It won't be clear. And in the initial stages of the decline following peak there is plenty of wiggle room to disguise the fact that we are in decline, and room to perpetuate the state of denial in which we have existed for the past couple of decades. As has often been said, peak oil ultimately will only be recognized in the rearview mirror.
I believe peak oil has already arrived. I believe, in fact, based on the data available, peak oil arrived in 2005. In the several years since then enormous effort has been put into disguising that reality and turning to other energy sources and classifying them as oil to allow that facade to be maintained. I do not believe we are adjusting to the reality of peak oil. I belief we are firmly entrenched in trying to deny that reality and scrambling ever harder to find some viable energy alternative that will allow us to carry on business as usual to keep us from ever having to deal with that reality. The chances are very slim, however, of finding any energy source that will allow us the massive amounts of cheap energy that we derive from crude oil. Peak oil will probably mean peak net energy and be followed by an accelerating decline in all forms of energy.
The news, however, is not all bad. Peak oil and peak net energy will also mean peak CO2 emissions. That will allow the planet a chance to begin recovering from the damage our high energy human lifestyle has inflicted on the planet. That at least improves the prospect of the long term survivability of our species and that of other species with whom we reluctantly share this planet.

Global oil production

Global oil production (crude oil plus condensate) has been on a plateau / in decline for 7 years, resulting in high energy prices that are feeding inflation, eroding family budgets and crippling the World economy. It is time for the international political community to awaken to the risks posed by Peak Oil. A British Government report published last week under a Freedom of Information Act (FOIA) request makes clear that civil servants working at the UK department of Energy and Climate Change (DECC) seem very aware of the risks posed by peak oil.

Wake up people, saying it isn't so does not make it that way.

Depletion study of Alaskan crude-oil extraction

Click here for a great Study by the brilliant David Roper on the depeltion of Alaskan oil reserve.

A Perspective On Oil

Sometimes people seem to act like we've always had oil and always will. The Republicans assure us that all we need to do is drill more and our energy problems will be solved. That's not only short-sighted -- it's wrong. The truth is that we've had a short but glorious run with oil, but it's nearly over -- whether we like it or not. If we have not yet reached the point of "peak oil" (the point where production begins to fall no matter how much drilling is done), then we are very close to it. It's time to change our energy priorities and find something new (and hopefully renewable) -- either that or kiss our way of life good-bye. Chart is from the pages of the excellent blog

Algae Could Replace 17% Of U.S. Oil Imports

ARIEL SCHWARTZ FAST COMPANY Thu Apr 14, 2011

We've already revealed how you're going to be ingesting gallons of algae every day, once it's used to spice up protein supplements, medication, and even skin moisturizer. But the slimy green stuff has powers that extend far beyond making your skin less wrinkly to performing useful functions. In fact, if used to make fuel, it has the potential to replace 17% of all U.S oil imports, with the added bonus for bored headline writers of literally going green.
It's not as if there is a shortage of startups attempting to make biofuel out of algae. But many of them have run into a problem: growing algae requires a lot of water, and that drastically limits production capabilities, because using a lot of water to save oil is like rearranging the deck chairs on the Titanic. But water problems aside, a report from the DOE's Pacific Northwest National Laboratory calculates that 21 billion gallons of algal oil (that's equivalent to 17% of our current dead-dinosaur oil imports) could be produced on a land area the size of South Carolina (spread across the country, of course, unless South Carolina wants to volunteer). [I volunteer 'em! T.]
The water required would be enormous--25% of the total we already use for irrigation. But that isn't much different than the water requirements for other, less land-efficient biofuel sources. Corn-based ethanol requires a similar amount of water (when water use per mile driven is taken into account), but algae can produce 80 times more oil per hectare than corn.
But no matter the efficiency, it's still too much water to make any real dent in oil imports, at least if growers rely entirely on freshwater ponds. DOE researchers are currently investigating the potential to grow algae in salt water and waste water. There's no word on how much it would cost to scale up to 21 billion gallons of algal oil from our current levels of basically nothing, but we imagine it would be cheaper than continuing to import oil and then all dying during bloody resource wars.

New EV Page

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Breakthrough promises $1.50 per gallon synthetic gasoline with no carbon emissions

UK-based Cella Energy has developed a synthetic fuel that could lead to US$1.50 per gallon gasoline. Apart from promising a future transportation fuel with a stable price regardless of oil prices, the fuel is hydrogen based and produces no carbon emissions when burned. The technology is based on complex hydrides, and has been developed over a four year top secret program at the prestigious Rutherford Appleton Laboratory near Oxford. Early indications are that the fuel can be used in existing internal combustion engined vehicles without engine modification.

According to Stephen Voller CEO at Cella Energy, the technology was developed using advanced materials science, taking high energy materials and encapsulating them using a nanostructuring technique called coaxial electrospraying.

“We have developed new micro-beads that can be used in an existing gasoline or petrol vehicle to replace oil-based fuels,” said Voller. “Early indications are that the micro-beads can be used in existing vehicles without engine modification.”

“The materials are hydrogen-based, and so when used produce no carbon emissions at the point of use, in a similar way to electric vehicles”, said Voller.

The technology has been developed over a four-year top secret programme at the prestigious Rutherford Appleton Laboratory near Oxford, UK.

The development team is led by Professor Stephen Bennington in collaboration with scientists from University College London and Oxford University.

Professor Bennington, Chief Scientific Officer at Cella Energy said, “our technology is based on materials called complex hydrides that contain hydrogen. When encapsulated using our unique patented process, they are safer to handle than regular gasoline.”

Peak Oil is Here

THE END OF CORN? UNIVERSITY OF CENTRAL FLORIDA RESEARCH TEAM PRODUCES CELLULOSIC ETHANOL FROM ORANGE PEELS

His method is much cheaper and environmentally friendly than producing ethanol from corn. Daniell's technique involves using plant-derived enzymes to break down orange peels and other waste materials into sugar, which is then fermented into ethanol.

Producing fuel from waste has not only garnered more attention from the media of late, but it is also receiving much more attention from researchers and scientists, as well as politicians and financiers. Daniell and his team have had their research funded by the U.S. Department of Agriculture.

One of the greatest features of using waste for fuel is that it is an abundant resource that will never be in competition with food resources. According to Daniell discarded orange peels could produce up to 200 million gallons of ethanol annually in Florida alone.

Although Daniell's research and technology requires much more testing before it goes commercial, the professor says, "this could be a turning point where vehicles could use this fuel as the norm for protecting our air and environment for future generations."

IEA Acknowledges Peak Oil.

The IEA (International Energy Agency) is the mouth peace of the world's political and corporate leadership. Every year it releases a report on the world's energy outlook. This graph below is from that report. I have added two graphic notes. The first is to point to the area of "fields not found". Colin Campbell (Peak Oil Elder) has proved that this is really a coded word for shortage. Also, notice the growth in "unconventional oil" such as tar sands and coal to oil is, as a percentage, very small and also on a side note very expensive.

For the first time ever the IEA is acknowledging PEAK OIL. As you can see from their graph we are just past it. One thing to remember is this is about the big picture. Whether peak oil has happened or will happen in the next few years, the big overall take away is " ACT NOW OR REACT LATER"

If you have been a reader of my blog, you may have seen this graph below in early 2009. This is the big picture. Drink it in, and prepare for the ride.

Turning Algae into Energy

Just three years ago, Colorado-based inventor Jim Sears shuttered himself in his garage and began tinkering with a design to mass-produce biofuel. His reactor (plastic bags) and his feedstock (algae) may have struck soybean farmers as a laughable gamble. But the experiment worked, and today, Sears' company, Solix Biofuels in Fort Collins, is among several startups betting their futures on the photosynthetic powers of unicellular green goo.

The science is simple: Algae need water, sunlight and carbon dioxide to grow. The oil they produce can then be harvested and converted into biodiesel; the algae's carbohydrate content can be fermented into ethanol. Both are much cleaner-burning fuels than petroleum-based diesel or gas.

The reality is more complex. Trying to grow concentrations of the finicky organism is a bit like trying to balance the water in a fish tank. It's also expensive. The water needs to be just the right temperature for algae to proliferate, and even then open ponds can become choked with invasive species. Atmospheric levels of CO2 also aren't high enough to spur exponential growth.

Solix addresses these problems by containing the algae in closed "photobioreactors"—triangular chambers made from sheets of polyethylene plastic (similar to a painter's dropcloth)—and bubbling supplemental carbon dioxide through the system. Eventually, the source of the CO2 will be exhaust from power plants and other industrial processes, providing the added benefit of capturing a potent greenhouse gas before it reaches the atmosphere.

Given the right conditions, algae can double its volume overnight. Unlike other biofuel feedstocks, such as soy or corn, it can be harvested day after day. Up to 50 percent of an alga's body weight is comprised of oil, whereas oil-palm trees—currently the largest producer of oil to make biofuels—yield just about 20 percent of their weight in oil. Across the board, yields are already impressive: Soy produces some 50 gallons of oil per acre per year; canola, 150 gallons; and palm, 650 gallons. But algae is expected to produce 10,000 gallons per acre per year, and eventually even more.

"If we were to replace all of the diesel that we use in the United States" with an algae derivative, says Solix CEO Douglas Henston, "we could do it on an area of land that's about one-half of 1 percent of the current farm land that we use now."

Solix plans to complete its second prototype by the end of April and to begin building a pilot plant this fall. That plant will take advantage of CO2 generated from the fermentation and boiler processes of New Belgium Brewery, also in Fort Collins. The company's initial target is to be competitive with biodiesel, which historically sells for about $2 per gallon, wholesale. They believe they can reach this goal within a few years, and are ultimately aiming to compete with petroleum.

John Sheehan, an energy analyst with the National Renewable Energy Laboratory (NREL) in Golden, Colo., believes these goals are within reach. "There is no other resource that comes even close in magnitude to the potential for making oil," says Sheehan, who worked in the lab's algae program before it was shut down by the Department of Energy. One of algae's great strengths, Sheehan adds, is its ability to grow well in brackish water. In the desert southwest, where much of the groundwater is saline and unsuitable for other forms of agriculture, algae can proliferate.

GreenFuel Technologies Corp., based in Cambridge, Mass., is focused on cultivating algae that can produce high yields of both biodiesel and ethanol. There are more than 100,000 strains of algae, with differing ratios of three main types of molecule: oils, carbohydrates and protein. Strains of algae high in carbohydrates as well as oils produce starches that can be separated and fermented into ethanol; the remaining proteins can be turned into animal grains. GreenFuel hopes its pilot plant will see initial yields of 8000 gallons of biodiesel and 5000 gallons of ethanol per acre of algae.

The main focus now, says Cary Bullock, GreenFuel's president and CEO, is figuring out "how to grow algae fast enough and cheap enough that it makes sense economically. That's not easy to do."

With the science well in hand, the degree to which algae-based biofuels can replace petroleum—or the limited acreage of traditional feedstocks—rests upon that bottom line. Once the technology hits the ground, will a commercial-scale facility be on par with petroleum? Says Bullock: "You don't know until you've actually built the thing."

Transition to a world without oil

World Oil Production

More proof of the Oil Peak:

62 Miles Per Gallon ? Do It !

Reposted from Jobsanger

In most parts of the world drivers have become accustomed to driving a smaller and more fuel-efficient automobile. They may not be as small as the tiny electric commuter vehicle shown above, but they have accepted that the day of the gas-hog is gone. Not so in the United States.

Americans fell in love with large, powerful, gas-gorging vehicles long ago, and they show no signs of wanting to change that. Even after a couple of gas crises and a Gulf oil disaster, Americans still want their gas-hogs. All you have to do is look around on any city's streets to see that. The most popular vehicles by far are still the large SUVs.

But that has to change soon. The world is fast approaching peak oil (the point at which production drops no matter how much new drilling is done), and some believe we may already be at that point. Whether Americans want to admit it or not, oil is not an unlimited resource and will run out. Refusing to recognize this and make the necessary changes will just set the country up for serious problems in the near future.

With this in mind, the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) released documents yesterday that show the new fuel economy standards that will be expected from the corporate average fuel economy standards (CAFE) by 2025. The current CAFE goal (average mileage for all cars a company sells) is to be 34.1 miles per gallon (mpg) by 2016. The government is wanting to shoot for a mpg figure of between 47 and 62 by the year 2025.

Personally, I agree with the many environmental organizations that say the 47 mpg figure is just too low -- the 62 mpg figure is better and not at all unreachable. There are several advantages to making the figure as high as possible:

* As we approach peak oil, the competition for the remaining oil is going to be fierce and may involve military action. The less oil this country needs, the more secure it will be.

* Using and burning less oil will produce less air pollution and make the air healthier for all of us who have to breathe it -- especially those with asthma and other health problems.

* Burning less oil will also cause less environmental damage -- an important point considering we are nearing the point of no return for global climate change.

* The higher mileage rates will save consumers thousands of dollars over the life of an automobile. Since our politicians don't seem to have the political courage to pursue policies that will create new job creation, this could be very important in a jobless recession that could last for many years.

The NHTSA and the EPA documents say a much larger portion of the car market will have to be devoted to electric and hybrid automobiles. They think to reach the 62 mpg goal, electric cars would need to cover 7% to 14% of the market, and hybrid vehicles would need to make up 55% to 68% of all car sales.

I think those figures are probably too high. That assumes that gas-powered cars have reached the technological limit for fuel efficiency. I don't believe that, although I have no problem with electrics and hybrids taking up a larger market share. I think there is still room for innovation and technological advancement -- regardless of the whining we will undoubtably hear from the auto companies.

It would be a mistake to listen to the negativity and settle for the lower end of the proposed new standards (47 mpg). The 62 mpg goal is achievable and would produce far larger benefits for our society. And there's no real reason the goals couldn't be even higher after 2025.
Posted by Ted McLaughlin

Military Study Warns of a Potentially Drastic Oil Crisis

By Stefan Schultz

A study by a German military think tank has analyzed how "peak oil" might change the global economy. The internal draft document -- leaked on the Internet -- shows for the first time how carefully the German government has considered a potential energy crisis.

The term "peak oil" is used by energy experts to refer to a point in time when global oil reserves pass their zenith and production gradually begins to decline. This would result in a permanent supply crisis -- and fear of it can trigger turbulence in commodity markets and on stock exchanges.

The issue is so politically explosive that it's remarkable when an institution like the Bundeswehr, the German military, uses the term "peak oil" at all. But a military study currently circulating on the German blogosphere goes even further.
The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises.

The study, whose authenticity was confirmed to SPIEGEL ONLINE by sources in government circles, was not meant for publication. The document is said to be in draft stage and to consist solely of scientific opinion, which has not yet been edited by the Defense Ministry and other government bodies.

The lead author, Will, has declined to comment on the study. It remains doubtful that either the Bundeswehr or the German government would have consented to publish the document in its current form. But the study does show how intensively the German government has engaged with the question of peak oil.

Parallels to activities in the UK

The leak has parallels with recent reports from the UK. Only last week the Guardian newspaper reported that the British Department of Energy and Climate Change (DECC) is keeping documents secret which show the UK government is far more concerned about an impending supply crisis than it cares to admit.
According to the Guardian, the DECC, the Bank of England and the British Ministry of Defence are working alongside industry representatives to develop a crisis plan to deal with possible shortfalls in energy supply. Inquiries made by Britain's so-called peak oil workshops to energy experts have been seen by SPIEGEL ONLINE. A DECC spokeswoman sought to play down the process, telling the Guardian the enquiries were "routine" and had no political implications.

The Bundeswehr study may not have immediate political consequences, either, but it shows that the German government fears shortages could quickly arise.
Part 2: A Litany of Market Failures

According to the German report, there is "some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later." The Bundeswehr prediction is consistent with those of well-known scientists who assume global oil production has either already passed its peak or will do so this year.

Market Failures and International Chain Reactions

The political and economic impacts of peak oil on Germany have now been studied for the first time in depth. The crude oil expert Steffen Bukold has evaluated and summarized the findings of the Bundeswehr study. Here is an overview of the central points:

Oil will determine power: The Bundeswehr Transformation Center writes that oil will become one decisive factor in determining the new landscape of international relations: "The relative importance of the oil-producing nations in the international system is growing. These nations are using the advantages resulting from this to expand the scope of their domestic and foreign policies and establish themselves as a new or resurgent regional, or in some cases even global leading powers."
Increasing importance of oil exporters: For importers of oil more competition for resources will mean an increase in the number of nations competing for favor with oil-producing nations. For the latter this opens up a window of opportunity which can be used to implement political, economic or ideological aims. As this window of time will only be open for a limited period, "this could result in a more aggressive assertion of national interests on the part of the oil-producing nations."
Politics in place of the market: The Bundeswehr Transformation Center expects that a supply crisis would roll back the liberalization of the energy market. "The proportion of oil traded on the global, freely accessible oil market will diminish as more oil is traded through bi-national contracts," the study states. In the long run, the study goes on, the global oil market, will only be able to follow the laws of the free market in a restricted way. "Bilateral, conditioned supply agreements and privileged partnerships, such as those seen prior to the oil crises of the 1970s, will once again come to the fore."
Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."
Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a "partial or complete failure of markets," says the study. "A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis."
Global chain reaction: "A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil," says the study. "It is likely that a large number of states will not be in a position to make the necessary investments in time," or with "sufficient magnitude." If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it's so tightly integrated into the global economy.
Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could perceive the upheaval triggered by peak oil "as a general systemic crisis." This would create "room for ideological and extremist alternatives to existing forms of government." Fragmentation of the affected population is likely and could "in extreme cases lead to open conflict."
The scenarios outlined by the Bundeswehr Transformation Center are drastic. Even more explosive politically are recommendations to the government that the energy experts have put forward based on these scenarios. They argue that "states dependent on oil imports" will be forced to "show more pragmatism toward oil-producing states in their foreign policy." Political priorities will have to be somewhat subordinated, they claim, to the overriding concern of securing energy supplies.

For example: Germany would have to be more flexible in relation toward Russia's foreign policy objectives. It would also have to show more restraint in its foreign policy toward Israel, to avoid alienating Arab oil-producing nations. Unconditional support for Israel and its right to exist is currently a cornerstone of German foreign policy.

The relationship with Russia, in particular, is of fundamental importance for German access to oil and gas, the study says. "For Germany, this involves a balancing act between stable and privileged relations with Russia and the sensitivities of (Germany's) eastern neighbors." In other words, Germany, if it wants to guarantee its own energy security, should be accommodating in relation to Moscow's foreign policy objectives, even if it means risking damage to its relations with Poland and other Eastern European states.

Peak oil would also have profound consequences for Berlin's posture toward the Middle East, according to the study. "A readjustment of Germany's Middle East policy … in favor of more intensive relations with producer countries such as Iran and Saudi Arabia, which have the largest conventional oil reserves in the region, might put a strain on German-Israeli relations, depending on the intensity of the policy change," the authors write.

When contacted by SPIEGEL ONLINE, the Defense Ministry declined to comment on the study.