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Joe Sparano: Peak Oil Speculation Diverts Focus on Energy Reality
A recent commentary by Walter Kohn and Tam Hunt about the theory of peak oil recycled a litany of conjecture and dire predictions about the state of the world’s energy supplies. I’d like to respond.
The peak oil theory is not new, nor is it provable or disprovable. In that regard, arguing about when the world will run out of oil is like arguing about how many angels can dance on the head of a pin.
We cannot know the answer and the argument is not relevant to the important and urgent energy issues that we face today. Those issues instead require factual evidence and thoughtful analysis.
There is an abundance of information from very credible sources about the supply of oil throughout the world that remains available for development. The information is based on science and hard evidence — not speculation.
The most recent U.S. Geological Survey estimate puts the remaining discovered and undiscovered global reserves at 1 trillion to 2 trillion barrels of oil, far larger than previously thought. Of the total world endowment (potential supply) of 5.6 trillion barrels of oil, USGS calculated humans had consumed just 18 percent as of 2000.
And, here’s what the International Energy Agency World Energy Outlook 2008 said: “The world’s total endowment of oil is large enough to support the projected rise in production beyond 2030 in the reference scenario.”
The Kohn-Hunt commentary cites declining U.S. oil production as evidence of diminishing reserves. This is patently untrue.
Politics and government policies have prevented American energy companies from accessing huge volumes of identified domestic reserves and expanding the production of oil and natural gas in vast regions of our country.
According to USGS estimates, there currently are 116 billion barrels of oil and 650 trillion cubic feet of natural gas on federal lands on- and offshore available for U.S. consumers, that have been off limits because of politics and government policies. That is more than five times the current amount of U.S. proved oil reserves and equal to almost 30 years of natural gas supplies.
It’s ironic that Messrs. Kohn and Hunt cite Cambridge Energy Research Associates to support their theory. CERA recently concluded that peak oil arguments “are based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future.”
“This is the fifth time that the world is said to be running out of oil,” CERA said. “Each time — whether it was the ‘gasoline famine’ at the end of WWI or the ‘permanent shortage of the 1970s — technology and the opening of new frontier areas has banished the specter of decline. There’s no reason to think that technology is finished this time.”
Moreover, as I have indicated previously, the theory of peak oil is not the real issue. The important issue people in America and in California must face is: How can we safely and intelligently increase our energy security and create a lasting, sustainable energy future?
We can do that, first, by making sure we are fully utilizing our own domestic energy resources in ways that respect the environment and communities in which those resources are located. The petroleum industry in California has demonstrated it can develop and bring to market oil and natural gas from onshore and offshore areas safely and without harm to the environment.
According to the U.S. Minerals Management Service, since 1970 our industry has produced more than 1 billion barrels of oil from waters off California and spilled 850 barrels. More oil seeps naturally into the ocean off Santa Barbara each week than has been spilled by the petroleum industry in the last 39 years.
Second, we need to diversify our energy portfolio. Petroleum companies and others are working diligently to research, develop and commercialize a broad range of new fuels and technologies that might someday augment or even far in the future replace petroleum.
But, we must be realistic about the time it will take to develop those alternatives and the large volumes of new energy that will be required to meet the nation’s and the world’s growing demand for energy.
According to the most recent Energy Information Administration’s Annual Energy Outlook, U.S. energy demand is expected to increase 9 percent between now and 2030. During that time, the amount of energy we get from biofuels, wind and solar is expected to increase dramatically.
But even with dramatic growth of those alternative energy sources, oil and natural gas are expected to still provide 55 percent of our energy needs in 2030. Coal and nuclear power are projected to provide another 31 percent. That leaves a bit less than 14 percent of our total energy needs in 2030 being supplied by hydro-electric power and all forms of alternative fuels — combined.
Finally, we can do a great deal to build a sustainable energy future by conserving the energy we are using by using it more wisely, and by looking for and embracing improved energy efficiencies, both at the industrial and commercial level as well as in our homes.
Building a secure and sustainable energy future will take a great deal of thought, heavy lifting and cooperation. It is a major challenge for our society. Colorful and threatening speculation about an energy apocalypse has no place in that challenging future.
— Joe Sparano is president of the Western States Petroleum Association. The Sacramento-based organization represents the petroleum industry in California and five other Western states.
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» on 06.25.09 @ 03:59 AM
http://tinyurl.com/lwxqnw
PEAK OIL: MYTH OR REALITY?
snip
“Nevertheless, in 2008 the IEA conducted for the first time[4] a detailed field-by-field analysis of global oil production and its findings are bleak. Asked by a journalist on what the previous analysis relied on, the Chief-Economist of the IEA acknowledged, “it was mainly an assumption”[5]. In the 2008 WEO, they have analysed about 800 fields, which account for ¾ of global reserves and more than 2/3 of global oil production. They come to the conclusion that decline rates are far higher than previously thought, between 6.7 and 8.6% a year[6]. As result, they now estimate that to maintain the current levels of oil production (about 85 MBD) by 2030 the world would need to develop and produce 45 MBD; as said by Dr. Fatih Birol, approximately four new Saudi-Arabias[7].
Simultaneously, they have analysed all the projects that are financially sanctioned in all the countries in the world (about 230) up to 2015. As it takes five to ten years to produce oil from a new field, they have a clear image of the coming situation. When they add all the projects together (if all of them see the light of the day –unlikely with the current credit crunch[8]-) they will bring about 25 millions barrels per day[9]. However, because of the important decline rates, the world will still be short of “at least” 12.5 MBD before 2015[10]. Asked by a journalist if this means Peak Oil, Dr. Birol answered, “We are facing a serious threat”[11].“snip
» on 06.25.09 @ 04:11 AM
The debate regarding peak oil has particular relevance for Santa Barbara and California. Santa Barbara has unique challenges and opportunities in this debate. Our coastline is inundated every day with 200 barrels of oil that seep into coastal waters. At the same time, known offshore Santa Barbara oil reserves that can easily be produced are about 2 billion barrels, with the U.S. Minerals and Management Service estimates of undiscovered resources of oil and gas at over 6 billion barrels in the Santa Barbara area. As Joe Sparano correctly stated, in the last 40 years, there have been about 850 barrels spilled offshore, versus 2 million barrels of natural seepage into our environment. Since before Native Americans arrived, there have been in excess of 7 billion barrels of oil that have seeped into our local marine environment, given current seepage rates and estimates by the University of California that the seeps have existed for over 100,000 years (their estimate is actually 500,000 years). What has been the effect over the last 40 years of offshore oil production in the Santa Barbara region? The seeps have been reduced and our beaches are actually cleaner and will remain cleaner for the next several thousand years. Meanwhile, 850 barrels have been spilled- 4 days worth of natural seepage. If we allowed more Santa Barbara offshore oil and gas production- what would be the benefits and risks? The benefits- $ 350 million per year for Santa Barbara County, more energy independence- reducing CA oil imports by 50%, and reducing the risk of an oil tanker spills by 50% in coastal waters, tax revenue to pay for the best education in the United States for Santa Barbara schools, fully funded social services, enough tax revenue for Santa Barbara to completely convert the county to solar electricity and fund rebates for electric plug-in hybrid cars, lower local taxes, money for new waste water treatment plants, and cleaner beaches due to less seepage. The drawbacks- a possible spill that would quickly be cleaned-up, and groups who live off of opposing offshore oil and gas needing to find something else to do. What’s the smarter policy? When the 1969 spill occurred, opponents of offshore oil had a valid point about limiting offshore oil production. But in the intervening years, technology and regulations have improved and technology now allows those offshore resources to be extracted from land based slant drilling with no realistic marine spill risk. It’s not so much that the opponents of offshore oil production were wrong since 1969, but rather our knowledge base and technology have improved, and the linkage between producing oil and gas and using the revenues to fund accelerated renewables conversion can be established in legislation. It may now be necessary for the people of Santa Barbara and California to act to change public policy in this area. We will all benefit- especially our children.
» on 06.25.09 @ 04:27 AM
My thoughts exactly - thank you for putting them into words. Tired of the manipulation by environmentalists using the tools of fear mongering.
» on 06.25.09 @ 06:34 AM
While I agree with much of what Common Sense says, one question remains. Where are our children going to get their oils needs from in 20 years. The US with 5% of the world population is using 25% of world oil. Leaving a little oil in the ground for our childrens use might make sense. Conservation should have been and needs to be the only solution to our oil problems.
» on 06.25.09 @ 12:52 PM
My thoughts exactly - thank you for putting them into words. Tired of the manipulation by environmentalists using the tools of fear mongering.
» on 06.25.09 @ 12:53 PM
Ok so what about peak silicon for solar panels?
» on 06.25.09 @ 02:31 PM
You can just as easily take it out of the ground and store it for our children’s use if that is a valid reason for not drilling. One way or the other, the oil will come out of the ground. Meanwhile there is nothing stopping the search for alternate energy. Fact is, it’s not going to replace fossil fuels anytime soon. Get real Bob.
» on 06.26.09 @ 12:32 PM
Mr. Sparano practices sophistry at its rhetorical best. Socrates would appreciate his
essay. If Jason Reitman makes a sequel to the hilarious “Thank You for Smoking”, Sparano should audition for a lead role.
Let’s get something straight here. Whether we’re at “peak oil” or not, we all know that petroleum products are a limited, finite, non-renewable energy source.
Geology takes millions of years to compress dead organic matter into oil, gas, coal, diamonds. We don’t have that long to wait for “new” energy to be found, or made.
If a key resource is strategic, finite, non-renewable, then why deplete the limited
reserves we know America has, just to retain our “normal” lifestyle a little longer?
Scientists tell us carbon-based fuels are key culprits in rapid climate change.
Are they the only cause? No. But they are a big one.
So, while America expands its incentives for renewable, non-carbon based energy
for the future, why is Mr. Sparano (as a political conservative) so averse to trying
to actually “conserve” something big? Like wasted energy now used to light, heat,
cool most homes and buildings, or power most Bush-era cars (from those bankrupt
American car companies)?
The fastest, cheapest, most effective way to reduce dependence on foreign oil and
emission of carbon-based green house gases, is to use LESS of them on every level.
Making all buildings and cars more energy efficient WILL create millions of new jobs
in the building trades and the automotive industry, while “alternative” energies ramp
up to fill another component of energy demand in years to come.
And guess what? Most of those new jobs will be in the private sector, not in D.C.
Why does that bother Mr. Sparano?
If we try all this, first, and it doesn’t work, or it turns out that global warming is disproved, won’t we still have most of our domestic oil and coal reserves left, to use later? So what will we have lost?
But if it works, and we reduce energy demand across the board, without lowering America’s quality of life, isn’t that a “win” for the country, and for generations still unborn?
Why not give it a try, Joe? Most big energy companies are already heding their bets,
creating “clean” and “green” energy divisions as fast as their lawyers can incoporate
them. What do they know that Sparano isn’t telling us?
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