Peak Oil v Peak Carbon v Giant Carbonised Insects

More on how the rug rats of today are going to live as adults, dodging the gnashing jaws of carbonised giant insects:  is it just me or is the oil peak being pushed out further and further?

Over the last few months, and despite limited interest in the industry (other than to shut it down), there seem to be a plethora of new oil deposits found / exploited.  Big ones.  Some media refer to them as giant fields.  If this observation is correct, then Peak Oil is a thing of the past and we are definitely all going to be gobbled. 

As an aside, with so many giant carbonised insects – such as the meter long centipede referred to in an earlier blog – we will also have a new source of food /protein to feed the masses tipped to hit 10 billion in my [old already] lifetime. 

But back to the new oil sources.  Some months ago I read about BP (and others) making a large find off the northern coast of the UK.  Or was it the end of last year?

Anyway another has been announced only last month.  UPI reports “British energy company Premier Oil announced that it made an oil discovery in the Catcher area of the country's territorial waters of the North Sea.”

And remember a few months ago the announcement of the large oil deposit find off the coast of Ireland;  poor ol’ Ireland that has lost its wealth, its income, and a whole generation to austerity??  Exploration company Providence Resources announced the find off the coast of Cork.  The find was referred to as “major”.  The article went on to say ”The coastal Basins surrounding Ireland have long been known to harbour valuable natural resources. It’s estimated that they could produce 10 billion barrels of oil and an unquantifiable amount of gas. In the past, exploration has been held back by a lack of technology and low oil prices.”

As probably more of a political statement, Kurdistan has started shipping oil to Turkey.  Whilst in east Africa, “Tullow Oil, a London-based explorer with the most licences in Africa, said it planned to accelerate drilling in Kenya after making the East African (Kenya) state’s first discovery earlier this year.  Tullow forecast Kenya has the potential to exceed Uganda, where with Total and CNOOC it plans to invest more than $10bn to unlock an estimated 2,5-billion barrels of oil. $4 per barrel.”

But wait, there’s more.

The Norwegian oil firm DNO International said it is ramping up oil production in Iraq as it confirmed an oil discovery in the country's resource-rich Tawke field and has resumed drilling operations in Yemen. DNO, which explores and produces oil and gas in Iraq and Yemen and plans to expand activities in North Africa and the Middle East

And more.

“Online PR News – 05-July-2012 –PierMax Energy Exploration is pleased to announce that, it has made a significant oil discovery in current onshore Kurdistan oil exploration project.”

And so it goes on and on.

And to crown my paranoia about never reaching Peak Oil (which has been forecast to be occurring around now) and thus never reigning in the carbon problem, I read George Monbiot recent article False Summit (meaning oil summit or ‘peak’).  The great eco campaigner. 

His first sentence is “We were wrong about peak oil: there’s enough in the ground to deep-fry the planet.”  And ends with “But right now I’m not sure how I can look my children in the eyes.”

In between those two emotionally charged sentences, is a great article, and as usual well researched.  Citing various article, he asserts that the recent sustained high price of oil has triggered to new oil resource boom.  That indeed, it is not so much how much oil, but at what price. With US$2.6 trillion spent over this three year period in exploration etc (end 2012).  Some of it extracted using fracking, the environmentally fraught polluter.

Yeah gads!!

So back on the research car and this was found.  Published in 2006, so it overlooks the recent massive investment in oil production and discoveries;  by the way, all of which are found and delivered from very difficult methods / places (fracking, deep sea). These five key points are believed at that time to be irrefutable and the basis of Peak Oil. 

1. The biggest oilfields in the world were discovered more than half a century ago, either side of the Second World War.

2. The peak of oil discovery was as long ago as 1965.

3. There were a few more big discovery years in the 1970s, but there have been none since then.

4. The last year in which we discovered more oil than we consumed was a quarter of a century ago.

5. Since then there has been an overall decline.

So anything written since then to confirm this thesis?  Well in May this year, there is a long post on oil and the industry on scepticblog.org by a reasonably senior academic geologist.  It is extremely lengthy, however sufficiently erudite and simplistic (for this oil idiot) for it to be recommended to all.  These are just a few extracts of interest: 

Academic geologists are nearly 50% women now, and they are distributed across all age classes. Oil geologists, by contrast, are nearly all old white guys in their 60s or older, with a lot of young men (and a few women) just recently hired in the business. The entire generation that would now be in their 40s and 50s is missing because of the attrition during the oil busts of the late 80s-90s. [I just thought this was interesting].

As the Time magazine article pointed out, now they’re spending most of their time and money on increasingly risky and expensive operations like fracking, pumping water in old fields to push out the last drops of oil, or mining oil sands with all their environmental costs. The biggest push is in offshore oil platforms—and the 2010 Gulf oil disaster (along with previous oil disasters on platforms around the world) shows just how risky it is to drill so far offshore.

So what about the world discovery rate? That answer has been known for a long time. World discovery rate peaked in 1965, and has been steeply declining ever since, even though more and more exploration is conducted in the farthest reaches of the globe in the past 47 years. The “peak oil” effect has probably already occurred, and we are likely on the slow downward decline in discoveries of cheap, easy-to-pump oil.

……in recent years most of the estimates place the total volume of ultimately recoverable oil in the range of 1.8 to 2.6 trillion barrels, with most estimates around 2.0 trillion barrels.

The booming economies of China and India, along with some other developing nations, are greatly exceeding any increased production due to new discoveries. The numbers are truly staggering. From only 50,000 barrels/day in 1980, world consumption is now almost 100,000 barrels/day. As oil executive Peter Tertzakian pointed out in his book title, we’re nearing the once-unimaginable consumption rate of a thousand barrels a second! Even as the U.S. finds more oil in unconventional places, we cannot keep our domestic prices down because demand outside the U.S. is driving the world price upwards.

So by my calc that is ~55,000 years of oil supply at today's consumption levels if we use the 2 trillion estimate with current consumption at 100k barrels per day.  At that level we are toast!! Something doesn't seem to be adding up here.  Then we look at the next argument, of 1,000 per second.  That equals about 86 million barrels per day; being 60,000 per minute;  3.6 million barrels per hour; etc.   So I think he meant 1,000,000 not 100,000.  Which brings the ~55,000 back to ~55 years of supply at today's consumption level.  Phew!!

There is also the fact that the peak of discovery of major oil fields occurred 47 years ago, and there have been no giant oil fields found in a long time, and most of the world’s older oil fields are nearing their ends.

An acre of corn consumes 80 gallons of oil in the form of pesticides, fertilizers, and fuel for the tractors.  Without [oil], our food supply would collapse, and the world would be looking at a global famine. The end of cheap oil will force everyone to re-examine agricultural practices, since you can’t make most pesticides or fertilizers out of coal. 

And thus cannot replace lost oil with biofuel. 

So rug rats.  There are your choices:  eaten by giant carbonised insects or die of starvation.  Blame the old white guys in the oil industry. 

However, I believe that we can confirm that peak oil has definately come and gone.  So that is hopeful.  Right?

Ethanol, its complex

That’s the tricky thing isn’t it?  If the production and use of ethanol emits more carbon in aggregate than the production and use of gasoline, then what’s the point?  We may replace the falling oil production, but at what price to the planet?

Then there are the other externalities to consider.  Land used for fuel instead of food.  Excess water usage.  Land degradation.  Capacity limits to scaled up production.  Biodiversity depletion from monoculture production.  Poison from the different gases released.

As outlined here, it is time to find out if ethanol is worth its weight in oil relative to carbon emissions.  Information usually obtained by plundering publications on the internet.  And what is found, is, it’s complicated. 

So there is good news and bad news.  However, to round out the debate it is interesting to note that ethanol is produced by various crops.  In the USA it is mostly corn;  in Europe it is rapeseed;  in Brazil (for example) it is sugar cane; in China it is seaweed; and in Australia it is soy bean.

Production of each of these has different carbon footprints and externalities, and even within each specific crop, there are differences that can make it carbon neutral or carbon (eq) intensive.

For example the (subsidised) corn production in the US and rapeseed in EU is causing the prices to rise internationally, and directly affecting food security for the rest of the world.  Especially poverty stricken countries, for which maize and edible oils are a large part of their diet.  The UN’s FAO called for a reduction in production of both.  Further they produced a study that shows in Latin America only Argentina, Brazil, Paraguay and Columbia could sustainably produce biofuel without affecting food security.  

Then there is this article, which suggests that depending on how the corn is produced it could be 20-30% less carbon intensive / 20-30% more carbon intensive than gasoline.  It is land usage that makes the biggest difference.  Quoting: 

“if you assume that all the land used to produce the ethanol feedstock is already in production, you tend to find a carbon footprint at the low end of the range, since there is little net reduction in the carbon sink, and ethanol looks pretty good. If you assume that all the land used to produce the ethanol feedstock came from forests that had been chopped down, or marginal land that produces very low yields, you tend to find a carbon footprint at the high end of the range, and ethanol looks bad. Thought about another way, ethanol made from corn or sugar that displaces human or animal food production is likely to be relatively greenhouse gas friendly compared to ethanol made from corn or sugar that comes from new land put into production just for ethanol.”

Then there is this report, that compares the cost of subsidising corn ethanol versus sequestering the land used for the subsidised corn as carbon sinks.  The latter trumps the former in dollar cost to the taxpayer.  And this report shows how corn is produced at the farm level, may / may not produce substantial amounts of nitrous oxide, a GHG 300 times worse than carbon.  

And then there is this study “Ethanol as Fuel: Energy, Carbon Dioxide Balances, and Ecological Footprint”.  Really, it was the most comprehensive. 

It compares the production of corn in the USA versus sugar in Brazil, as inputs for biofuel.  US comes out looking not so good, and Brazil very good (as in reports above).  

I recommend you read it.  But for a summary of US:  to produce sufficient ethanol in 2012, all the available cropland in the US must be turned over to corn.  By 2036, add in the entire range and pasture areas as well.  And by 2048, every bit of land except for the cities.  So, ethanol is not an option.  And they give many other reasons as well.

In Brazil, only 10% of cropland is required to run the total fleet for the next 30 years.  Starting to consider the complexity? They conclude:

In the Brazilian case, for carbon sequestration, it seems to be more effective to reduce the rate of deforestation than to plant sugarcane.

In the US case, the use of ethanol would require enormous areas of corn agriculture, and the accompanying environmental impacts outweigh its benefits. Ethanol cannot alleviate the United States' dependence on petroleum.

Finally, there is this recent report.  Seaweed, that has been grown at a commercial scale for more than a century in China, is now producing biofuel in small trials.  As with sugarcane, and corn, it is the sugar that is the key ingredient. And it doesn’t compete with food crops, it does not require land, plus it is a pollutant cleanser not polluter.  On a per acre basis it produces 50% more ethanol than sugarcane, and 3 times that of corn.   There is more info here.

So there it is.  No rah!! rah!! or slaps on backs for using ethanol.  It is not all the same.  Indeed much production is creating worse environmental and carbon problems than it is fixing.  The seaweed biofuel seems to be the answer.

But if I can’t get my sushi, I‘ll be cross.  

Californian Refiners and Mammon

It is going to be interesting to watch the writhing and squirming over the next few decades, as companies and countries lobby fiercely to avoid the reduction in the use of fossil fuels.

As it starts to dawn on them that the carbon assets on their balance sheets aren’t assets at all, but weapons of mass destruction.  They are in fact great big fat losses.  In this blog, we referred to oil shale and how its extraction uses more carbon than it does to burn it.

And in this blog, about how we cannot burn all the known fossil fuel reserves that we have anyway, as that will take us past a 2^oC tipping point and we will all die from the effects of climate change.

And yet the fossil fuel companies (oil, gas, coal) continue to spend tens of billions every year researching and attempting to extract ever more untenable sources of fossil fuel.

One of my favourites a few months ago was the announcement of BP and its partners [remember Mexico?] about a GBP10 billion investment in the UK North Sea.  On the day it was announced in the newspaper, a cartoon was published with a pair of seagulls on the edge of a cliff looking out over the North Sea at an oil rig and ordering futures in detergent.  BP reports it is its biggest investment ever.

I mean, how dumb are its shareholders?  This oil cannot be burnt according to Carbon Tracker. So that would be GBP10 billion for what?  Money that could have been returned to shareholders so that they can financially prepare for the new carbon burning reductions.

And today a Bloomberg report reveals that the Californian government has passed rules discouraging the states [oil] refiners from processing types of crude that produce high levels of carbon during production, such as those pesky oil sands in Canada.  Already banned in Europe.

And I am delighted to inform you that the Californian Air Resources Board spokesman refers to it as “stuff”.  

The refiners complain, calling the rules anti competitive, writhing and squirming, lobbying and lying, and generally trying to overturn the rules.  We lost our moral compass to mammon years ago, but even I am embarrassed for them.