When the last oil well runs dry

BBC News Online ^ | Monday, April 19, 2004 | By Alex Kirby

[Momaw Nadon]

Just as certain as death and taxes is the knowledge that we shall one day be forced to learn to live without oil.

Exactly when that day will dawn nobody knows, but people in middle age today can probably expect to be here for it.

Long before it arrives we shall have had to commit ourselves to one or more of several possible energy futures.

And the momentous decisions we take in the next few years will determine whether our heirs thank or curse us for the energy choices we bequeath to them.

Sunset industry? Oil production could soon peak

Industry's lifeblood

There will always be some oil somewhere, but it may soon cost too much to extract and burn it. It may be too technically difficult, too expensive compared with other fuels, or too polluting.

An article in Scientific American in March 1998 by Dr Colin Campbell and Jean Laherrere concluded: "The world is not running out of oil - at least not yet."

"What our society does face, and soon, is the end of the abundant and cheap oil on which all industrial nations depend."

They suggested there were perhaps 1,000 billion barrels of conventional oil still to be produced, though the US Geological Survey's World Petroleum Assessment 2000 put the figure at about 3,000 billion barrels.

Who holds the world's oil - and how long will it last?

Too good to burn

The world is now producing about 75 million barrels per day (bpd). Conservative (for which read pessimistic) analysts say global oil production from all possible sources, including shale, bitumen and deep-water wells, will peak at around 2015 at about 90 million bpd, allowing a fairly modest increase in consumption.

On Campbell and Laherrere's downbeat estimate, that should last about 30 years at 90 million bpd, so drastic change could be necessary soon after 2030.

And it would be drastic: 90% of the world's transport depends on oil, for a start.

Most of the chemical and plastic trappings of life which we scarcely notice - furniture, pharmaceuticals, communications - need oil as a feedstock.

The real pessimists want us to stop using oil for transport immediately and keep it for irreplaceable purposes like these.

In May 2003 the Association for the Study of Peak Oil and Gas (ASPO), founded by Colin Campbell, held a workshop on oil depletion in Paris.

Changed priorities

One of the speakers was an investment banker, Matthew Simmons, a former adviser to President Bush's administration.

From The Wilderness Publications reported him as saying: "Any serious analysis now shows solid evidence that the non-FSU [former Soviet Union], non-OPEC [Organisation of Petroleum Exporting Countries] oil has certainly petered out and has probably peaked...

"I think basically that peaking of oil will never be accurately predicted until after the fact. But the event will occur, and my analysis is... that peaking is at hand, not years away.

"If I'm right, the unforeseen consequences are devastating... If the world's oil supply does peak, the world's issues start to look very different.

"There really aren't any good energy solutions for bridges, to buy some time, from oil and gas to the alternatives. The only alternative right now is to shrink our economies."

No cheap oil, no cheap food

Planning pays off

Aspo suggests the key date is not when the oil runs out, but when production peaks, meaning supplies decline. It believes the peak may come by about 2010.

Fundamental change may be closing on us fast. And even if the oil is there, we may do better to leave it untouched.

Many scientists are arguing for cuts in emissions of the main greenhouse gas we produce, carbon dioxide, by at least 60% by mid-century, to try to avoid runaway climate change.

That would mean burning far less oil than today, not looking for more. There are other forms of energy, and many are falling fast in price and will soon compete with oil on cost, if not for convenience.

So there is every reason to plan for the post-oil age. Does it have to be devastating? Different, yes - but our forebears lived without oil and thought themselves none the worse.

We shall have to do the same, so we might as well make the best of it. And the best might even be an improvement on today.

[biblewonk]

Well I'm certainly glad you looked over the Eldora case study. I thought their numbers looked pretty good. As I mentioned, it would be very interesting to see how the numbers would stack up against other power plants of that size. It sounds like you are skeptical of scaling up the size of windfarms to decrease the cost per kwhr.

[biblewonk]

"For the first 5 years, the district will also pay $8,000 for a maintenance contract with NEG Micon, but Grove hopes the district will have its own maintenance crew trained by the end of that time. This low-interest financing package combined with the area’s decent, but not outstanding wind resource made this project economically viable. "

It turns out that the Eldora case did have mention of maintenance.

[ItsTheMediaStupid]

The only problem with heat pumps is poor sizing and installation. Your friends problem with their heat pump is the biggest grip I have with many contractors and even some engineers in warm clime's. They size the heat strip for the design heat load and ingnore the full cooling capacity of the heat pump. That is if your heat pump is 48,000 BTU but your heat strip is 24,000 BTU then in defrost mode the heat pump will put out 48,000-24,000= 24,000 BTU of cooling. That is when you need heat the system will be cooling the house the equivilant of two tons of ice per hour! So the heat strip should always be a slightly higher capacity.

Also many gas furnaces because of their price are grossly oversized. I don't like that because it can cause excessive temperature cycling during warmer periods, that is the furnace won't come on till the coldest part of the house is very cold and it may be very hot when it turns off. But because of the oversize people think heat pumps will not put out any heat, they will if properly sized. In cold climates I suggest they should be sized to be equal to the heat strip size even if oversized for AC, that way the unit will warm the house to 30 degrees and below. I had a house in South Caroline that had the heat strips locked out at 24 degrees, worked fine but would take a while to warm up in the morning if below 30 or so.

As far as your generation loss you are correct except for the numbers, but you mentioned line losse. The turbines and generator is about 40% effecient. So you are right the heat strip is less effecient when you consider generation. But not so with heat pumps. Consider an average season efficiency of a heat pump at about 300% so the total system is 40%*300%= 120% efficient. Of course how much you save depend on the cost of electricity and gas in your area. My present house has both heat pump with a gas furnace for secondary heat, no heat strips! If gas prices go up I turn down the outside thermostat if they go down or electicity goes up, I turn the stat up.

[painter]

The CEO of British Petroleum was interviewed some years back.He predicted that we will find more oil under the Gulf of Mexico than there is in Saudi Arabia.

[Gorjus]

It turns out that the Eldora case did have mention of maintenance.

Well, I missed it in the article you posted. Most importantly, it wasn't in the table that showed their net cost effect. They showed a predicted (assuming the winds stay in about the right range) $12000 operating surplus. If you take out $8000, they get pretty close to break-even - and that only because of a large loan subsidy.

That doesn't get better if they pay their own maintenance guy. He might be able to do some things, but a lot of the maintenance problem is up on the tower, and it takes a specialist (or at least, more and expensive specialist equipment) for that.

And they also didn't show any allowance for materials - perhaps the $8000 allows for some repair/refurbishment, but electrical motors don't last forever. It wouldn't surprise me to see parts at 5-10% of initial purchase price each year - and there goes even your subsidized break even.

All those costs are inherent in the price you pay for electricity from the supplier, and a 'fair' comparison needs to recognize that.

One last thing - if it were a business, there would be a recognition of depreciation. However, if they're paying a mortgage on the generator, that is an equivalent sort of cost. In other words, you don't have to add additional costs to the table to pay for replacement of the entire unit, but you also can't assume away the payments for the loan. By the time the loan is paid off, you're probably going to need to buy a new unit - more or less. (Obviously, you might have a 5 year wearout/depreciation with a 10 year mortgage, or vice versa, but the cost item that reflects purchase needs to remain in the table.)

Bottom line: Your Eldora cast study says it's probably not at break even at current technology even with the large loan subsidy. As I said before, I'm all for research, but until it can compete with no artificial factors like loan or tax subsidies then it's still a research item, not a proven technology.

[Gorjus]

The only problem with heat pumps is poor sizing and installation.

Well, and that they don't end up cost-competitive. As I said, I don't remember the exact basis for the numbers, whether the reason the heat pump didn't look good was because of initial purchase price or insufficient advantage in operating costs, but for what the contractor said was an equivalent system, the heat pump never showed to be a good deal. Of course, if we really moved to a more energy-efficient economy - not subsidized, except in the sense that moving to nuclear power for electrical generating frees up oil for other uses, etc. - then there might be some advances in heat-pump technology or cost that would make the theoretical advantages work out in the bottom line.

By the way, I'm not sure I was off on the numbers on steam and generators - or else you left out a factor. My model was to say that, for a given energy level at the heat source, you get 60% at the steam turbine, and 60% at the generator. Combine them and you get 36% net efficiency when you finally get to electricity - which is not too far from your 40%. (Or else, in your calculations, you left out the additional factor of changing the mechanical energy of the rotating turbine shaft into electrical energy.)

I'd need to understand your heat-pump efficiency number as well. Once again, you can get apples and oranges. The real efficiency question needs to be something like BTUs of Cooling per kilowatt-hour. That depends on temperature differential to the heat sink (outside air) and so on for both options. When I see efficiencies above 100% (waayyy above in your numbers), it's clear that we have a definition issue to resolve.

If you even care. It's not like we're really disagreeing. It's arguing in the margin, and it really takes real hard numbers, which depend on the specific situation (average temperatures, etc.). However, you have intrigued me enough that I may call my air conditioner guy and ask him for some more information on heat-pumps. I'm not going to have him rip out my brand new system (*smile*), but I am curious.

[biblewonk]

Bottom line: Your Eldora cast study says it's probably not at break even at current technology even with the large loan subsidy. As I said before, I'm all for research, but until it can compete with no artificial factors like loan or tax subsidies then it's still a research item, not a proven technology.

I think you are holding windpower's feet to the fire here. The local grocery store in CR Ia held out for a 1,000,000 dollar grand before building a 3.5 million dollar grocery store. Every company in town makes various kinds of deals with the city before they build. This is also true of energy, the brown energies are supplimented in many ways.

Maybe I should try and find another case study to post so we have some new data to discuss.

Also, windmill lifespan is more like 20 years not 10. I was just reading LM Glassfiber's home page and they had a thing about the first blades they made for a windmill in denmank. It's small and butt ugly but it's been running 25 years. A lot of the ones in California that fell apart did so because they were junk to begin with and the companies that made them were not serious about the business, hence they don't exist anymore.

[TexasCowboy]

Deep water drilling in the Gulf of Mexico holds tremendous promise.
Now if we can just keep the environazis off our back long enough to make it pay.

By the looks of this thread, we've got a lot of Greenpeace members on FR.

[ItsTheMediaStupid]

Gorjus,
I see you are just pretending to know what you are talking about. Large power plant generators are about 90% efficient turbins vary from 30% to well over 40%. You are probably used to hering SEER figures for A/C and heat pumps, but we engineers who design them use differant numbers. Mostly we use COP or coefficient of performance. Usually about 3 for an average system. That is three times the heat being pumped for each unit of heat consumed or 300%. The contractors and utility companies often use numbers to convince you of whatever is best for their profit margin, but ususally heat pumps are the most efficient and lowest cost system, often even if used with heat strips. Now if you live in an area where gas is cheap and electricity is expensive, heat pumps may not be the most economical choice, but they are the most energy efficient.

[Gorjus]

I see you are just pretending to...

... be polite, and interested in a civilized discussion.

Basic rule of thumb: When someone goes ad hominem, the discussion is over. Have fun with your arrogance.

[ItsTheMediaStupid]

Gorjus,

It is not a discussion when another pretends that he knows something, then tries to prove that windpower and heat pumps are inefficient, then plugs in ficticous numbers. Heat pumps have long been known to be the most efficent form of heating, just not allways the most convienient, and sometimes not cost effective in areas with high electric rates. In some parts of the country heat pumps are very popular. I believe that it's you who have tried to maintain that windpower is not cost effective. I suspect in areas that have little hydro electic, or nuclear power, and are forced to use more expensive natural gas for fuel, that wind power is very cost effective. I believe California and other western states fit the above catagory.