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Energy the nexus of everything: April 2012 Archives

As a self-proclaimed energy dork, it's somewhat exciting to see so much discussion of oil and gasoline (and petrol!) in the news recently. The discussions range from indicating that The Limits to Growth is still basically correct to how technology is trumping all limits to enable the United States to soon be the world's number one oil producer and start exporting oil within 10 or 20 years. Non-energy adept or interested persons can be confused easily, and unfortunately this is many. Of course, energy 'experts' don't agree.

But the lay or 'expert' person can read recent articles from Time magazine ("The truth about oil," cover article April 9, 2012) and The Economist ("Keeping it to themselves," March 31, 2012) that are good for thinking about the situation relating to higher oil prices: increased demand from developing and exporting nations, and a lack of any practical increase in gross global oil extraction the last 5-7 years. Basically the oil discussion, at least in the United States, seems to be comes down three camps.

(1) Those who think that limits from natural resources and technological progress will bring peak oil production relatively soon (for crude oil we can say global production has been statistically flat from 2005-2011; see the US Department of Energy's Energy Information Administration's International Energy Statistics). Here, 'relatively soon' means within a decade from now, but possibly even 1 year. Unfortunately, we won't officially be able to declare a sustained drop in global crude oil production until a few years of statistically significant lower oil production rates. One year does not make a trend. As a subsidiary but economically important concept to this peak oil camp, is the total exported oil available for purchase around the world. The world's exporting countries and growing economies (mainly China and India) are significantly consuming more oil each year for the past decade - leaving less for the traditional oil consumers of Europe, U.S., Japan, and Australia. This camp is largely composed of system-thinking academically-minded physicist/engineer/ecologist types that might get some money from oil and gas companies or are retired from the oil and gas industry.

(2) Those that think technological progress that is enabling oil production from oil sands (Athabasca, Canada), pre-salt formations and/or deep offshore (Brazil, Gulf of Mexico), oil from shales using horizontal drilling and hydraulic fracturing (North Dakota, Texas), and possibly offshore arctic if sea ice does not actually form for significant time during the northern hemisphere summer. Thus, oil production is up in many places, and higher prices make this production possible - the market system at work. This camp is largely composed of those who make some portion of their living from selling, producing, or researching how to sell or produce oil and oil products.

(3) Those that think market speculation by entities that do not produce oil or sell refined oil products. People bet that the price of oil will go up, and therefore that indeed makes the price go up. This camp is largely composed of a subset of persons thinking about getting elected to public office (or staying elected).

As far as my position, I'm in camp #1 above as far as being the overwhelmingly most important factor - for main reason that I believe the world is spherical. For fun and interesting takes on being in camp #1 and talking to those who are not, see this blog by Tadeusz Patzek and this one by Tom Murphy. The point isn't so much if peak oil production will occur, but whether or not you should take anticipatory action.

From being in discussions with a few persons of camp #1, I can say that the projections for the ramifications for peak oil production are quite varied. All believe, including myself, that some form of easily noticeable lifestyle adjustment will occur for Americans and most citizens of developed countries. Arguably we are seeing this in the form of fiscal and budgetary difficulties in the European countries you've been reading about in the news since 2008 (Greece, Portugal, Ireland, Spain). In the U.S., this budgetary difficulty is being seen at the municipal/city level.

But I might disagree with some of the peak oil (camp #1 above) about what we can know about the severity of lifestyle adjustments over time. As oil production decreases to a point where most recognize it has occurred (say being below 5% of the peak for a few years in a row), I think we'd continue to see similar but slightly expanded trends as we've seen the last 4 years: less travel in developed economies, higher unemployment (but not crippling), and a limited number of governments at various scales defaulting on debt. Good things that will start to occur are more walking, biking, and conceptualizations about less consumption (but that will be hard to act upon for most).

At the next stage 'solutions' will be flowing like Spindletop. We will be told to believe that many elixirs will cure our 'ill', but we will be wise to prioritize our wants to those that are more crucial to social cohesion. There could be increased thinking about making sure all infrastructure (cities, buildings, homes, water infrastructure) is built in a way to maximize access and resiliency instead of sprawl and expansion. The idea of transition engineering (as discussed by Susan Krumdieck) and the Transition Town movements (just search the word) will become more mainstream models for learning to consume less energy in a more core manner. I myself look to learn more from these existing movements and look to apply their principles to understanding energy transitions in a fundamental manner as to how they represent increasing or decreasing complexity (a la Joseph Tainter). Luckily for me that somewhat fits my job description ...