Currently viewing the tag: "Peak Oil"

President Obama unveiled his “Blueprint for Energy Security” yesterday, including a plan to cut oil imports by 1/3 over the coming decade. To say that the President’s plan is disappointing is an understatement. While paying lip service to all the typical rhetoric about our dependence on foreign oil, the President’s ‘blueprint’ for the future reads like an affirmation of the status quo   – not only does it lack vision, it ignores the fact that the challenges facing our energy future are transportation related.

The point is the ups and downs in gas prices historically have tended to be temporary.  But when you look at the long-term trends, there are going to be more ups in gas prices than downs in gas prices.  And that’s because you’ve got countries like India and China that are growing at a rapid clip, and as 2 billion more people start consuming more goods — they want cars just like we’ve got cars; they want to use energy to make their lives a little easier just like we’ve got — it is absolutely certain that demand will go up a lot faster than supply.  It’s just a fact.

The United States of America cannot afford to bet our long-term prosperity, our long-term security on a resource that will eventually run out, and even before it runs out will get more and more expensive to extract from the ground.

Seventy percent of our petroleum consumption goes to transportation — 70 percent.  And by the way, so does the second biggest chunk of most families’ budgets goes into transportation.  And that’s why one of the best ways to make our economy less dependent on oil and save folks more money is to make our transportation sector more efficient.

We’ve also made historic investments in high-speed rail and mass transit, because part of making our transportation sector cleaner and more efficient involves offering all Americans, whether they are urban, suburban, or rural, the choice to be mobile without having to get in a car and pay for gas.

With all this rhetoric, you would think that the ‘blueprint for energy security’ would involve seriously expanding the transit capacity of our cities (where most of the population lives), but that’s not the case.

Now, meeting the goal of cutting our oil dependence depends largely on two things:  first, finding and producing more oil at home; second, reducing our overall dependence on oil with cleaner alternative fuels and greater efficiency.

Now, last year, American oil production reached its highest level since 2003.  And for the first time in more than a decade, oil we imported accounted for less than half of the liquid fuel we consumed.  So that was a good trend.  To keep reducing that reliance on imports, my administration is encouraging offshore oil exploration and production — as long as it’s safe and responsible. 

If we are talking about seriously lowering dependence on foreign oil we should be lowering our dependence on all oil, foreign and domestic. Expanding US oil production is a cheap polical game that does not have a chance at impacting our dependence on oil or the price of oil at the pump. Maybe our production is up since 2003, but as the graph below from the US Department of Energy shows, US production peaked in the mid-1970′s.

From the US Department of Energy

US production has no chance of offsetting our annual oil appetite. Not even close. Our daily oil consumption is 18 million barrels per day, while our proven reserves of crude oil amount to about 19 billion barrels - that’s enough oil for about 1,000 days or 2.7 years at current rates of consumption!  Considering the challenges associated with accessing the remaining domestic reserves, one has to question the benefits of draining every last drop of oil from US soil given how little is left. It simply is not worth the environmental cost. With these numbers – who is the president fooling?

We’re also exploring and assessing new frontiers for oil and gas development from Alaska to the Mid- and South Atlantic states, because producing more oil in America can help lower oil prices, can help create jobs, and can enhance our energy security, but we’ve got to do it in the right way.

 Recent innovations have given us the opportunity to tap large reserves –- perhaps a century’s worth of reserves, a hundred years worth of reserves -– in the shale under our feet.  But just as is true in terms of us extracting oil from the ground, we’ve got to make sure that we’re extracting natural gas safely, without polluting our water supply. 

Recent innovations in natural gas exploration you say? Hmmm… you wouldn’t be talking about the amazingly destructive process of extracting natural gas by injecting fissures in the earth with a high pressure toxic cocktail, only to dump the waste from the process into neighboring rivers, lakes and valleys? Yeah, I pass on that one too.

And that’s just the plan on the supply side of things – on the demand side the president points to biofuels and nuclear energy as big winners. Sigh…is he serious?

Mr. President we need solutions that will address the real problem: we have built our lives around the car. We live in cities that are designed for cars, and we rely on an economy that is run by cars (and trucks). We need to change how we live – we do not need gimmicks that dance around the problem. How about funding a massive transit expansion program that can really impact vehicle miles traveled in cities – after all, cities are less likely to reject federal money the way partisan governors have with high speed rail money.

While you are at it, be a champion of cities. Promote smart growth planning as a basic policy of the federal government. Wherever federal dollars go to urban development, housing, or transportation they should be tied to policies that create walkable, pedestrian friendly urbanism. FHA and other banking policies currently discourage mixed-use developments, while military bases across the country are being planned and built under the same suburban paradigm that helped create the energy crisis in the first place – policies that can change with minimal cost to anyone and have a greater impact on our energy use.

We need that.  We need you to dream big.  We need you to summon that same spirit of unbridled optimism and that bold willingness to tackle tough challenges and see those challenges through that led previous generations to rise to greatness -– to save a democracy, to touch the moon, to connect the world with our own science and our own imagination.

Ditto, Mr. President - right back at you.

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Happy Monday to all!  Here’s a little Monday morning humor to get our week started. Thanks to Jeffrey Lynne over at the South Florida Bicycle Coalition for this cartoon.

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The Miami Herald is reporting that the FDOT Port of Miami tunnel project will break ground in June. FDOT currently has three megaprojects in the works in South Florida. Check out the FDOT video plugging the Port of Miami tunnel project.  From the looks of it pedestrians and bicyclists were not considered in the design of the port tunnel/MacArthur Causeway.

FDOT Megaprojects:

  • $1 billion Port of Miami tunnel project
  • $1.7 billion Miami Intermodal Center near Miami International Airport
  • $1.8 billion reconstruction of Interstate 595 in Broward County.

It’s sad to see that FDOT has money to spend on theses megaprojects, yet it can’t come up with money for bike lanes on Sunset Drive. This goes to show where their priorities lie.

In other news, the US Military is warning that by 2015 oil demand will outstrip supply bringing us one step closer to peak oil. Perhaps FDOT should spend their money more wisely on projects which do not depend on cheap oil.

  • Beginning January 1 2010 the EPA will begin to collect greenhouse gas (GHG) data from large emitters of heat-trapping emissions under a new reporting system. The new program will cover approximately 85 percent of the nation’s GHG emissions and apply to roughly 10,000 facilities. (EPA)
  • The 2009 Global Energy Outlook from the International Energy Agency has announced a drop in the amount of atmospheric carbon:

In the first big study of the impact of the recession on climate change, the IEA found that CO2 emissions from burning fossil fuels had undergone “a significant decline” this year – further than in any year in the past 40. The fall will exceed the drop in the 1981 recession that followed the oil crisis.For the first time, government policies to cut emissions have also had a significant impact. The IEA estimates that about a quarter of the reduction is the result of regulation, an “unprecedented” proportion. Three initiatives had a particular effect: Europe’s target to cut emissions by 20 per cent by 2020; US car emission standards; and China’s energy efficiency policies.

  • Meanwhile down at the rig:  oil companies are hyping recent discoveries of oil in a lame attempt to offset the upcoming release of the Global Energy Outlook 2009. The report will provide a sobering assessment of dwindling supply and its effects on future prices. (NY Times)
  • Reading between the lines: In what critics say is a blow to the peak oil theory, BP has announced that it found a large oil field in the Gulf of Mexico. Reading closer the article had this to say:

    Because the oil is so deep underwater and difficult to extract, the price of oil will need to be above $70 a barrel to make drilling profitable, energy analysts said.

    BP declined to estimate the size of the new reserve, but a company executive said that it could be bigger than the three billion barrels of oil equivalent, combining oil and gas stocks, thought to be in the recently discovered Kaskida field nearby

    That’s not very reassuring considering our daily world consumption rate is about 84 million barrels per day. That comes out to be about a month’s worth of oil supply. Sounds like they are scraping the bottom of the proverbial barrel to me. Is discovering a month’s worth of oil really big news? Check out this interesting op-ed from Michael Lynch about the fallacy of peak oil. Not very convincing either.

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    Proven reserves of [of oil] are close to 1.3 trillion barrels, equal more than 40 years of output at current consumption rates; remaining recoverable resources of conventional oil alone are almost twice as big. But there can be no guarantee that those resources will be exploited quickly enough to meet the projected level of demand. Decline rates – the rate at which individual oilfields decline annually – are set to accelerate in the long term in each major world region…Even if oil demand was to remain flat to 2030, roughly four times the current capacity of Saudi Arabia would need to be built worldwide by 2030 just to offset the effect of oilfield decline.

    From the International Energy Agency 2008 World Energy Outlook

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    As the Senate considers moving forward with the recently approved House increase of $2 Billion to the ‘Cash for Clunkers‘ program, they should keep in mind that this stopgap measure is in conflict with one of their main responsibilities this session: creating the framework for a green economy. Cash for Clunkers is being sold as a program that will ease economic distress for car-dealers (a fallacy as described by auto dealeres themselves), as well as advance toward the goal of creating a green economy (it is assumed by getting more polutting cars off the road).

    There are two main problems with this. First, the US car industry has a really tough future ahead. Reports by International Energy Agency state that global production of oil will peak within the decade, while developing countries will continue to assume a greater percentage of demand. Increasing prices for oil will force people to drive less. Should we be spending $2 Billion more on prolonging the necessary contraction of the American car maker, or should we spend that money preparing for a future with drastically less oil?

    Second, as gas prices rebound, those cars are so inefficient that they are going to be off the road soon anyway. Why pay to get them off the road now, when we know they will just die off as victims of economic natural selection?

    We need to drastically reduce our greenhouse gas emissions, and that is not going to happen by trading in a car with 10 mpg for one that is 20. We need economic growth and job creation by being efficient with our federal tax dollars. That same $2 billion dollars could contribute to an expansion of transit, commuter rail, and high speed rail industries within the US. Other advanced nations are way ahead of us in this sector. In the same way that the government works with companies like Lockheed and Boeing to produce important parts of our air transportation infrastructure (and contributing big to our GDP),  they can do the same with mass transit infrastructure.  The Canadian-based aircraft maker Bombardier recently announced the the worlds biggest sale of 204 rail streetcars to the City of Toronto at a value of just under 1 trillion dollars. Those are Canadian tax dollars going to grow the economy by attacking a national problem at the local level. Sounds like a win-win to me.

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