Friday, December 18, 2009

Kjell Aleklett et. al. versus the International Energy Agency

I just read a very good article by Kjell Aleklett and others ("The Peak of the Oil Age - Analyzing the world oil production Reference Scenario in World Energy Outlook 2008." Aleklett, K. et.al. Energy Policy (2009), article in press.)

It's a critical look at the International Energy Agency's 2008 reference-case projection of 106.4 million barrels per day of oil demand in 2030 (including conventional, unconventional and NGL.) That's up from 84.3 Mbbl/day in 2007.

A key point is that

"...the issue is whether future oil production can match the projected demand and sustain continued economic growth rather than the IEA approach of predicting future demand and assuming supply will simply keep pace."

The paper looks at the various fractions of future liquids output dealt with by the IEA's projections and considers whether the reference scenario is realistic.

Aleklett finds "nothing to object to in the IEA's outlook for crude oil from currently producing fields," while noting that some very big investments need to be made in order for these production rates to be realized, and that the IEA seems to recognize this. Similarly, with regards to enhanced oil recovery, Aleklett "can consider the future outlook for this fraction as acceptable."

When it comes to production from fields yet to be developed, however, "The IEA is expecting the oil to be extracted at a pace never previously seen [i.e. depletion rates exceeding the 7% of remaining reserves per year, thus far seen only in the North Sea] without any justification for this assumption."

For fields yet to be discovered, Aleklett sees no problem with the expected amount of new oil to be discovered, but again, "an assumed production of 19 Mbbl/day in 2030 from fields yet to be found is based on an unrealistically high depletion rate never before seen in history." To put it in perspective, Aleklett applies a North Sea-level depletion rate to these 114 Gb and finds 9 million barrels per day--less than half that projected by the IEA--to be optimistic but still plausible.

For unconventional oil, Aleklett finds the expectation of 8.8 Mbbl/day in 2030 to be unrealistic. The main discrepancy is in the assumed 4.5 Mbbl/day for in situ recovery from oil sands. Aleklett points out that even with massive investments in the oil sands, Cambridge Energy Research Associates and the Canadian Association of Petroleum Producers give figures implying a much smaller production rate from in situ. (I would further note, with tongue placed firmly in cheek, that CERA is hardly the poster child for insufficient optimism when it comes to future oil supplies.) In any case, Aleklett concludes that the projections for unconventional oil are unrealistic, to the tune of 2.3 million barrels per day.

But the real howler is IEA's treatment of natural gas liquids, projected to reach 19.8 million barrels per day in 2030.

The first flaw in this is to treat a barrel of NGL as being equivalent to a barrel of oil. In fact, in terms of energy content, natural gas liquids have about 75% the energy density of petroleum. So 19.8 million barrels of NGL is really only equivalent to 14.9 Mbbl of petroleum.

The second flaw is that even that 14.9 Mboe/day figure is inconsistent with IEA's own projections for natural gas production. Natural gas liquids, as a percentage of dry gas production, are very consistent at about 15%. For NGL production to basically double by 2030 as the IEA suggests (going from 10.5 Mbbl/day in 2007 to 19.8 Mbbl/day in 2030,) implies that natural gas production as a whole will also double. (Actually increase by 90%.) But the IEA's own projection for natural shows only a 47% increase over that time frame. So, barring some wildly different behaviour by natural gas finds, there is a huge inconsistency here.

When all is said and done, Aleklett projects 75.8 Mbbl/day (after adjusting the NGL barrels to their real equivalent in barrels-of-oil-equivalent) compared to the 106.4 Mbbl/day stated by the IEA scenario.

Why is this important? Well, first and foremost, 75.8 Mbbl/day is well below today's production rate of about 85 Mbbl/day. Use Aleklett's methodology and you find that there is less oil available in 2030. IEA says there'll be more. When I look at these projections and the assumptions behind them, it really supports the notion that we'll hit peak production sooner rather than later, if we haven't already.

(Actually, I'm getting a little bit tired of hedging my words on that point. I'm naturally a pretty cautious guy and I don't want to cry wolf, even if it's 99.9% likely the wolf is right at the door. But it's been a few years since oil production has basically stagnated and I have yet to see any evidence that we have NOT hit peak. If somebody would like to show me some, I'm happy to look at it. But so far everything I see points to a peak in 2005.)

To put things another way: When you're in some discussion about whether we're at peak oil sooner rather than later, and someone says "Well, the IEA says blah blah blah and we'll have 106 Mbbl per day in 2030 which means we haven't peaked," you can answer very simply:

The IEA expects all future oil fields (i.e. those yet to be discovered and/or developed) to behave completely differently from every oil province we've dealt with in the past.

It also assumes that natural gas will behave completely differently and provide twice as much of those nifty NGL's that appear to fill the gap so well on paper. They don't give any explanation for why these resources will behave so differently, and so conveniently for our needs.

As well, the IEA has expectations for the tar sands that exceed those of some of the biggest optimists in the business.


(It also assumes that the required investments will be made, which is an entirely different kettle of fish--and one that's gotten considerably stinkier since the economy went and collapsed on us last year.)

Tuesday, December 15, 2009

Working definition of peak oil

A few years ago a graduate student contacted me to ask me about peak oil. At that time I was working as a municipal planner and had given a few presentations on the subject which were pretty well received.

She asked me what I thought was meant by peak oil. It was an interesting question because up to that point I had mainly been concerned with the big aspect of it, which is that oil production doesn't just go and go and go until there's no more oil and then stop. It increases, and then stagnates, and then declines. At the time--that is, before it seemed really likely that we had already hit the global peak in production--further nuance wasn't really that important. The main thing was to get across the idea that statements like "we have XX years of oil left at current production rates" are completely irrelevant and that energy supplies are going to be an issue sooner rather than later.

So I formed the following working definition, which I think does a pretty good job of incorporating all the variables.

"Peak Oil is the moment when

1. geology
2. geopolitics
3. geography
4. economics
5. environmental considerations
6. infrastructure problems

and/or

7. the limits of technology

combine to create a growing gap between the demand and supply of oil, refined oil products and/or viable alternatives."


That's not a perfect formulation. For one thing, it sets aside the fact that if oil prices go high enough, your economy crashes and then for awhile demand and supply are back in line. But unless a permanent recession is acceptable to you, I'd consider that a cure that's worse than the disease.

But it does a decent job of illustrating a key point, which is, the world to which we've become accustomed depends on a lot of things going right all at once. If one or two of these things goes wrong--a war in Iraq, or an embargo, or a hurricane in the Gulf of Mexico--as long as everything else goes more-or-less right, you can muddle through. But if a lot of these things start to go wrong at the same time, it becomes a problem.

And that's an important distinction. The simple "peak oil for dummies" formulation basically says that at a certain point, one big thing goes wrong (i.e. geology, you reach a certain point in the depletion curve and then production declines no matter what you do.) That's an oversimplification but it gives you the big picture. It tells you there's an iceberg ahead but at that point you don't need to know the exact shape of it.

The way I've stated it, there are a bunch of factors and you can afford to have one of them go wrong in a big way for awhile, as long as everything else keeps going smoothly. So, for instance, the Gulf War in 1990 was disruptive but it was the only thing going seriously wrong at that time. Or you can have several things go a little bit wrong; and it's still a problem but you can manage.

What started happening in the middle of the past decade is that too many things started going too wrong, all at once, for too long. That's the thing about icebergs. You're cruising along and you think it's still twenty meters ahead and suddenly.... CRUNCH.

(Of course, that analogy starts to break down. Seeing an iceberg ten or twenty meters ahead is like projecting peak oil in ten or twenty years--it's close enough that you need to be really taking serious measures to change course. In real life, our captains have basically been saying, "Well, we don't know for sure if it's ten or twenty meters, so let's just keep going full speed ahead until we can see it more clearly." Not recommended.)

Now, on balance, are things getting better or worse? Are more things going right, or wrong? I would have to say, if your goal is to have cheap energy and a booming economy, they are generally getting worse. I base this on the fact that today's oil price--on the order of $70 US/bbl--is about what it was in 2005 during Hurricane Katrina.

In other words,

(X + Y + Z) + economic recession
=
(X +Y +Z) + economic boom + Hurricane Katrina
=
$70/bbl

If the price of oil reflects a number of factors, then two of the really huge factors in September 2005 have since been subtracted. Logically, the fact that prices are where they were then means the sum of X, Y and Z has gotten bigger since. That's not particularly encouraging.


Wednesday, December 9, 2009

Ornery Planet

As the holidays approach, I'm looking forward to travelling a bit around Europe. I've been here a few times before, but only to Paris and London; in the former case, I was on the way to Morocco and in the latter, my plans to travel more widely were thwarted by an explosion and fire in the Channel tunnel, an economic collapse and (maybe I'm projecting here) a plague of locusts with my name on their bellies.

This time, though. This time I'm gonna do it.

My impending tour of Europe notwithstanding, though, a lot of the blush is off the travel rose, at least when we're talking about the less-developed countries favoured by penniless backpackers like me.

I worked for a few years in a travel-accessory store in Montreal and among the items they stocked was the entire Lonely Planet guidebook series. Over the course of three years' worth of slow periods, I read a good chunk of that library and in doing so, was immersed in the modern Traveller's ethos.

The Traveller's ethos proceeds from the notion that "there are tourists, and then there are travellers," that these are two distinct breeds, and that the latter is superior, entitled to a double ration of smugness by virtue of its willingness to immerse itself in local cultures and really get down with the lively carnival of diversity that is the global Benetton ad in which we live.

Conversely, the tourist is pampered and childish, laden with cameras and camcorders, loudly wondering why he can't get a Coors Lite in Islamabad on a Friday afternoon, dragging his giant suitcase across the rutted streets of Phnomh Penh on his way to the killing fields where he will make a beeline to the gift shop.

The traveller knows how to use chopsticks; the tourist doesn't need them for his Big Mac.

That's the idea, anyway.

In reality, in the less-affluent and more exotic places in the world where I've been, I've been gobsmacked to see how everything has been rearranged to cater to Western backpackers, and in particular to Western backpackers who don't want to be reminded that they are being catered to. The desire to be Sir Richard Burton, first white man to penetrate the deepest jungle/desert/Temple of Doom is a lucrative one for those who know how to cater to the illusion. The locals aren't stupid; in their circumstances they don't have the luxury of being stupid. They know there's a billion affluent Westerners who hunger for the authentic, unvarnished globetrotter's experience, and so they are damn well going to manufacture that authenticity.

So, in Morocco, I was approached every thirty paces by a guide offering to show me some local attraction, with the first words out of his mouth being, "It's not touristic." He didn't know me from Adam but he knew what I was after.

In Cambodia, just a year after that country had been removed from Robert Young Pelton's "five skulls" category of lethality, I was met at the mini-bus depot by a horde of moto drivers who got into a minor riot in order to be the one to take me where I was going.

In Thailand I saw guesthouses that played Hollywood movies all day, including the decidedly postmodern spectacle of young Western backpackers spending all day watching movies like The Beach, a Leonardo DiCaprio movie about a bunch of young Western backpackers who go to Thailand and are disappointed that Thailand is full of young Western backpackers who sit around at guesthouses watching Leonardo DiCaprio movies all day.

Now, I can hear some of you saying, "Well if you don't like travelling, then don't travel. You're very privileged to have that option. Quit your bitching." Okay, it's not that I don't like travelling, and I am acutely aware of how fortunate I am to live in a time and place where "polio" and "aerial bombardment" are just words, let alone having the option to travel all over the globe. So I'm not bitching. I've won the historical, geographical, ethnic and gender lottery.

What I'm saying is, a lot of us have this idea that by travelling around the world, we're gathering some kind of authentic experience and engaging in some transformative ritual that will make us come out the other end a better, wiser, more enlightened person. I've had the sadly humorous experience of watching two seasoned travellers try to one-up each other with their travel stories, like two nth-degree black belts in a kung fu movie, determined to prove once and for all who has the most killer move. Anywhere you've been, I've been somewhere more remote, more beautiful, more untouched, more authentic--a lot like the place you went, before people like me and you started going there by the planeload.

There's a whole publishing industry devoted to the frantic checking off of life experiences. The Ur-example is "1001 Unforgettable Places To Visit Before You Die." What a desperate, frantic, joyless pursuit of notches that implies! Hurry up, half your life is over and you're only at #207! At this rate you'll never finish by the time you're done.

Oil, gold, forests and bison are scarce resources on a finite planet. So are authentically untouched places, or even moderately untrampled ones. Telling ourselves otherwise is to pretend that Space Mountain is a real rocketship ride, or that the call girl is doing it 'cause she loves us, and not for the discreet envelope we have left on the mantelpiece.

It's fun to pretend. Sometimes we have to, just to stay sane.

But when it comes to authentic travel, be careful what you wish for. The world is a very different place compared to when Cartier and Cabot, Lewis and Clark, Stanley and Livingstone, even Jones and Ravenwood did their stomping around. The population of this big round theme park has nearly doubled in my lifetime and that cracking sound you hear is the joists of the boardwalk in the first stages of Malthusian collapse. For most of the people in most of the places you're likely to go, the authentic experience is hunger and desperation, blotted out with pirated Britney Spears recordings, seasoned with diesel fumes and oceans of discarded plastic water bottles.

Tuesday, December 8, 2009

Space Madness

Aalborg is located at just over 57 degrees north latitude, which means among other things that the inhabitants all have to walk around slightly stooped to avoid banging their heads on the Arctic circle. At this latitude, the length of the night in winter (and the day in summer) becomes rather extreme; on the solstice, I am told, the sun will rise at around 10am and set around 3pm, with much of the intervening five hours of daylight being a sort of long twilight.

This, combined with being in school and especially a project-based phase of that schooling (i.e. no classes or structured events this late in the semester) creates an odd sense of timelessness and limbo that is not entirely unpleasant. It will be interesting to see what it's like in summer when the sun is out almost all the time.

But as it is now, I inhabit an odd sort of science-fiction space colony existence. This is underscored by the institutional kollegium where I live, with a tiny shared kitchen (a galley, really) and very small individual quarters. I get up in what the clock assures me is the morning and get to work, spending hours doing brainy science stuff with a computer, with very little in the way of external signals as to what time it is. Outside, it is dark, flecked with pretty lights.

To make it even more science-fictiony--I didn't plan it this way--I'm listening to an online archive of old radio shows that were broadcast in the 1980's and early 1990's. I have basically parked my spaceship twenty light years away from Earth so I can listen to signals sent out decades ago, which are just getting there now.

Of course, in many ways this place is far less lunar than back home. The temperature doesn't go much below zero, and the landscape of North America--shopping malls, parking lots, individual houses separated by unbridgeable distances--is much more like the denatured futurist world of bubble cities and rocketship landing pads that seemed so exciting to Hugo Gernsback but that turns out (in my experience) to produce a chronic quiet desperation beyond Thoreau's wildest imaginings.

Here, I can ride my bike to where I want to go, should I choose to go out at all. That's more than I can say for somewhere like Orleans, Ontario in December, which (this time last year) had the added hassle of a public transit strike which drove home the inherent isolation of suburbia in winter.

The darkness was getting to me for awhile but I think I've adjusted. The new crewmen always need a bit of time to adjust to their surroundings. After awhile the daily routine of demagnetizing the fraculator, sideloading the balonium plant and cleaning tribbles out of the air ducts becomes a pleasantly monastic existence. At least until one of my shipmates comes back from EVA with an alien organism in her chest and inadvertently looses it on the crew.

Wednesday, December 2, 2009

Coffee and half-chewed Danish.

I've been living here in Denmark for three months now but I haven't done a lot of posting about it because (a) I've been kinda busy, (b) I've been crazy busy, or (c) some combination of (a) and (b).

It's an interesting place, occasionally dull, but dull in that way that extremely civilized countries can be. No bracing road duels with hillbillies in Hummers while riding your bike; no crazy people in the streets, cut loose by a shredded social safety net; and, unlike in North America, nearly everyone is trim, healthy and dressed like adults all with like dignity 'n' stuff.

The biggest challenge so far is that I can't understand a word anyone is saying, at least when they're speaking Danish. Now, that sounds kind of trivially obvious, Danish being a foreign language to me and all. So let me clarify. It's not that I don't know the meaning of the words that people are saying in this foreign language (though that too); it's that I can't understand what the hell they said. I could not take what someone says and transliterate it into a string of letters and then look up that string of letters in a Danish-English dictionary and determine the meaning of the word.

Danish stands out among languages for not being pronounced anything like how it is spelled. Consonants and syllables get smooshed together into this indistinct paste. The other day, one of my housemates asked another for the kitchen roll (i.e. paper towels.) The Danish word for this item is kokkenruller--superficially, four syllables, including a distinct k, n, r and l sound.

In fact, the word is pronounced with one and a half syllables: "kughghruh."

The closest analogy I can think of in English is where words like "worcestershire" get pronounced "wooster." Imagine that that rule applies to every word in the language and you start to understand the principle of Danish.

Actually, the "o" in kokkenruller is that Scandinavian o-like thing with a slash through it. Not only do they not pronounce their consonants, apparently they had to make up a bunch of new vowels that look a lot like existing vowels but make different sounds and--just to make things interesting--lie at the end of the alphabet. So o-with-a-slash, a-e dipthong, and a-with-an-orange-on-its-head all come after z, with evident implications for someone trying to look up a word.

I'll keep trying to learn the language. But if I need to wipe up a spill in a hurry, I'm liable to fall back on English.