The optimism typically found in the International Energy Agency's annual World Energy Outlook report is strangely missing this year. Instead, the IEA is taking a far more sober perspective on the world's oil-consuming future due to our ever-greater reliance on costly unconventional oil sources.
Output from currently producing fields is projected to fall precipitously, looking ironically like the steeply declining trajectory of peak oil's Hubbert curve. (I say ironically because the IEA has historically denied the existence of peak oil.) According to the report, by 2035 three quarters of currently operating oil fields won't be producing anymore. In fact, current fields are only expected to account for less than one fifth of that year's production.
That leaves over 80 percent of the IEA's 2035 production projection coming from new oil fields, ones that either haven't yet been developed or haven't even been discovered. And the contribution from that undiscovered category alone is still far greater than the one from currently producing fields. That's a tall order for new field discovery.
Undeveloped or undiscovered oil fields, growth in tar sands production and increased reliance on natural gas liquids account for all the expected growth in world oil production over the next two and a half decades. Curiously absent from this list is any contribution from conventional oil production -- you know, the type you can afford to burn in your car, the type the global economy can afford to use to power transoceanic trade? According to IEA projections, it now appears that the production of conventional oil peaked -- dare I say it? -- back in 2006.
Of course that doesn't mean the world is literally running out of oil, as the World Energy Outlook emphasizes with its forecast of ever-greater reliance on unconventional oil resources. But for these resources to become legitimate reserves, they have to be accessed at prices consumers can afford to pay. Yet even the IEA acknowledges that oil prices as high as $200 per barrel will be needed to make these resources economically viable in the future.
And therein lies the greatest weakness of their projections. The agency's forecast rightly projects that oil prices will soon rise to triple-digit range -- albeit nowhere near the pace that would be required to drive their supply forecast for robust growth in the use of unconventional oil. But nowhere is there any appreciation for what that would mean for world economic growth.
The global economy experienced its most severe post-war recession after its brief initial encounter with the very same prices that are now being forecast for our oil-consuming future. And that recession occurred despite the mitigation of record fiscal stimulus and bailouts that have left countries like Ireland bankrupt and may potentially threaten the solvency of creditor countries like the UK.
So what are the chances our economy will ever be able to afford to burn the oil that the IEA's supply forecast says we'll find?
- Almost NONE of the US media ever does an article on Global Peak oil or its aftermath.
- The minuscule number of articles that are done about Global Peak Oil almost immediately get buried deep in the archives of the media, if they are saved at all.
- Notice how quickly this disappeared from Huffpo into the archives with less than ten comments?
Why is there so little interest in something that will severely negatively impact every human on earth?
Why is there so much faith in some sort of energy miracle that is physically impossible?
Why does nearly everyone have their head in the (non-oil bearing) sand?
Filling stations wont get customers until there is a CNG fleet and there wont be a fleet til there are CNG filling stations. Some seed money is required.
Big consumers means; road freight, taxis, couriers, delivery vehicles, ferries/barges & locomotives (especially)....
Politicians will latch on to this green & cool idea & use it as a vote grabber, resulting in absurdly uneconomic subsidy's to mums and dads who cover low distances annually.
It could even appeal to mums and dads sans subsidy. If I were a big commuter and had the luxury of a driveway, i would jump at a car which gave me a range of ~150 Miles/240km for 25% of the wholesale, pre tax, cost, of the equivalent BTUs from petrol.
A parable: LPG (Liquid petroleum gas - more compressible than natural gas) is now quite popular in australia. Without any govt intervention I know of, the taxi industry adopted it in the 70s. Now, you can cover 2/3 of OZ in an LPG only vehicle.
A few brave executives and cab owners took a punt & the whole nation benefited. They shouldnt have been expected to go out on a limb like that. Govts should help.
But, it cant be done over night. The faster you have to convert transport to cng, the more uneconomic it will be.
Whereas a few measly incentives to the big oil consumers (easy targets) NOW, will have the US looking pretty good energy wise in 5 years.
Note also that virtually every square meter of the earth has been tested, repeatedly, for traces of oil. Even areas on earth that are off-limits to most non-locals (Burma, NK, etc.) have been extensively explored.
The hard reality is there is no more oil to be found, we pretty much know where it all is and have been pumping it from the ground as fast as possible.
It appears that the Chinese leadership is convinced that global peak oil is real since they have been investing all those bushels of greenbacks they have in two things:
- massive rebuilding of basic transportation infrastructure - both passenger and feight, electrifying most of it.
- Electricity production from solar, nuclear, wind and what ever other ways they can find that do not rely on oil. It appears that they want to use their coal to make diesel fuel for the vehicles they can't electrify rather than to produce electricity.
The IEA reports are only going to get worse in each year from now on.
I would also like to take the opportunity to clarify use of the term tar sands. Though they may appear to be visibly similar, tar & oil sands are quite different.
Oil sand is a naturally occurring mixture of sand, clay or other minerals, water & bitumen, a heavy & extremely viscous oil that must be treated before it can be refined to produce usable fuels such as gasoline & diesel. Tar is man made, a synthetically produced substance that is largely the last waste product of the destructive degradation of hydrocarbons.
The uses of oil sand & tar sand are also completely different;
• oil sand can be refined to make oil and ultimately fuel,
• tar cannot be refined and has historically been used to seal wood and rope against moisture.
The use of “tar sand” is a vituperative term used by opponents of the oil sands to negate the validity of the resource’s value & benefit both as a contribution to our