October 11, 2005
Peak Oil? Thinking Globally, Acting Locally
Hurricanes Katrina and Rita highlighted the vulnerability of the world's oil supply to disruptions and the resulting price shocks.
Matthew Simmons, author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, writes in the Time Magazine Bonus Section October 2005 on Global Business about "The Real Oil Shock."
Simmons concludes: "The bottom line: the global oil supply has probably peaked. While the world expects to consume 120 million [barrels of oil] a day two decades from now, actual supply may be half that rate. This conclusion aptly portrays the potential magnitude of the energy ditch we are now in. It is impossible to calculate the odds of this supply-demand imbalance happening, but prudent planning argues that the world should assume the bleaker scenario. Then it follows that a global plan to use oil more rationally must be urgently developed and implemented."
Simmons recommends: "Because 70% of the world's oil is used as transportation fuel, that would be the place to start. We need to create new forms of transportation fuels as well as reduce the quantity of goods and people moved by cars and large trucks. If a high percentage of products now transported by large trucks were shifted to the global rail system, an efficiency savings of three- to tenfold could be realized. If those goods could be shipped over water rather than rail, even greater efficiencies would be realized. While such changes will take time, they have to succeed."
Simmons also recommends: "A second change would come through embracing 'distributed work.' Most commercial businesses still operate on a concept that all employees need to work in the same office building to communicate. That was a necessity 20 to 40 years ago, but now faxes, e-mail, telephones and video conferencing allow people to work where they live, eliminating several hours of daily commuting time. And we need to manufacture more products and grow more food close to markets where they will be consumed."
In closing Simmons says: "If a master plan is quickly adopted on a global scale, the world can safely cope with a peak in oil production and create a more sustainable and enjoyable economy at the same time. If we ignore these changes and peak oil does occur, the unforeseen consequences could create a far darker world."
But other oil experts question Simmons' dire predictions.
Daniel Yergin, author of the Pulitzer-prize winning book Prize: The Epic Quest for Oil, Money & Power, recently wrote in The Washington Post an article titled "It's Not the End Of the Oil Age: Technology and Higher Prices Drive a Supply Buildup."
Yergin asserts: "We're not running out of oil. Not yet."
Nonetheless, Yergin concludes: "The growing supply of energy should not lead us to underestimate the longer-term challenge of providing energy for a growing world economy. At this point, even with greater efficiency, it looks as though the world could be using 50 percent more oil 25 years from now. That is a very big challenge. But at least for the next several years, the growing production capacity will take the air out of the fear of imminent shortage. And that in turn will provide us the breathing space to address the investment needs and the full panoply of technologies and approaches -- from development to conservation -- that will be required to fuel a growing world economy, ensure energy security and meet the needs of what is becoming the global middle class."
The Energy Information Administration of the U.S. Department of Energy features a year-old article titled "Long-Term World Oil Supply Scenarios: The Future Is Neither as Bleak or Rosy as Some Assert."
The authors John H. Wood, Gary R. Long and David F. Morehouse conclude: "Will the world ever physically run out of crude oil? No, but only because it will eventually become very expensive in absence of lower-cost alternatives. When will worldwide production of conventionally reservoired crude oil peak? That will in part depend on the rate of demand growth, which is subject to reduction via both technological advancements in petroleum product usage such as hybrid-powered automobiles and the substitution of new energy source technologies such as hydrogen-fed fuel cells where the hydrogen is obtained, for example, from natural gas, other hydrogen-rich organic compounds, or electrolysis of water. It will also depend in part on the rate at which technological advancement, operating in concert with world oil market economics, accelerates large-scale development of unconventional sources of crude such as tar sands and very heavy oils. Production from some of the Canadian tar sands and Venezuelan heavy oil deposits is already economic and growing. In any event, the world production peak for conventionally reservoired crude is unlikely to be 'right around the corner' as so many other estimators have been predicting. Our analysis shows that it will be closer to the middle of the 21st century than to its beginning."
While Wood, Long and Morehouse doubt Peak Oil is just around the corner, they nevertheless call for action sooner rather than later: "Given the long lead times required for significant mass-market penetration of new energy technologies, this result in no way justifies complacency about both supply-side and demand-side research and development."
Thinking globally and acting locally, key questions are: What can the Portland metropolitan area do to plan prudently for a potential worldwide shortage of oil? Are current efforts to promote transit and bicycling sufficient, or should more be done?
Looking to the state, are the efforts proposed in the draft update to the Oregon Transportation Plan enough? Are the measures called for in the plan likely to be implemented?
- Rex Burkholder recently posted an entry here about "Population Growth and Regional Traffic."
- James Mayer recently wrote in The Oregonian about "Think the commute's bad now? More jobs may mean more jams."
- Rob Zako previously posted an entry here on "The Breaking Point for the Supply of Oil?"
- Matthew Simmons is featured in a recent New York Times story on "The Breaking Point."
October 12, 2005 12:28 PM
Fascinating topic, thanks for the reviews.
I guess everyone (sort of) agrees on where the supply is going, no one agrees on how fast it will get there, or on how supply will interact with demand to affect price, or on how price changes will incent technology changes.
Then of course, as Mike Davis trenchantly observes, there are global climate change variables.... bearing down upon us, but at what speed we know not.
The post-oil future is not in doubt, only how fast it's going to get here, and what shape it will take as a result.
By the way, Simmon's comment that water transportation is highly energy efficient might be seen to bode well for Portland, which was originally situated to take advantage of the Columbia/Willamette river system.
If you believe those arguments the logic of 1860s city location at the conjunction of rivers could once again become relevant and a plus for Portland.
Likewise, Simmons idea of the value of agricultural urban proximity, bodes well for Portland, compared to other cities.
1850s here we come. Hard to imagine, but who knows?
October 13, 2005 10:19 PM
Jason McHuff Says:
Is it true that water transportation is more efficient than rail? You have to displace (push aside) all of that water...
But I do see how rail is much more efficient than roads: there's a big difference between (rough) asphalt/tires and (smooth) steel wheel/rail. Not to mention labor savings. Just turn your engine off if the train is blocking your crossing.
October 13, 2005 11:23 PM
Rob Zako Says:
Jason, I was also surprised to read Simmons' claim that water transportation is more efficient than rail. My physics sense tells me you are right about the energy it takes to push aside all that water.
As for rail being more energy efficient than truck, you are partially right.
As most bicyclists know at least intuitively, it takes energy to roll tires against "rolling resistance." Higher pressure (hence harder and skinnier) tires have less rolling resistance and are easier to pedal.
An extreme in energy efficiency would be steel "tires" on steel "roads" - in other words trains. Early bicycles before the adoption of rubber and pneumatic tires weren't that far from this "ideal." But they were known as "boneshakers" for obvious reasons. Such early bicycles were soon replaced by designs with greater rolling resistance but softer rides. For more details, see A History of the Bicycle.
Most bicyclists also understand "wind resistance" at least intuitively. It isn't that hard to pedal 10 mph on level ground in still air. It is somewhat hard to pedal at 15 mph and it is very hard to pedal 20 mph. Most of us mortals can't pedal much faster than 20 mph for an extended period of time. Pedaling at 30 mph is about the limit of even Tour de France riders.
What limits bicycle speed is wind resistance, which increases as roughly the cube of the speed: the wind resistance at 20 mph is actually roughly 8 times greater than at 10 mph; the wind resistance at 30 mph is roughly 27 times greater than at 10 mph. With numbers like these, even Lance Armstrong eventually hits a speed wall, which is humanly impossible to go beyond.
To combat wind resistance one can 1) assume a more aerodynamic shape, for example using aero bars, couching, shaving your legs, and so forth; or 2) draft in the air pocket behind another rider. Experienced bicyclists use both techniques to try to combat wind resistance and gain a little speed.
Which brings me back to rail. If you think about it, a train of rail cars is like a train of bicyclists drafting after each other. In both cases, wind resistance is reduced.
In conclusion, rail is more energy efficient than truck 1) because the steel wheels and rails minimize rolling resistance but also 2) because the train of cars minimizes wind resistance.
October 14, 2005 9:06 AM
Ross Williams Says:
The reason that people ship bulk commodities like wheat by river is that it is lower cost. I assume that also means it is more efficient. Some of that may be that they are shipping downstream, but iron ore and other commodities are shipped on the Great Lakes even though there are rail alternatives. While water resistance is probably greater than air, I suspect it is much less than land, axles, etc. And boats also travel at slower speeds.