Here are three leading observers on the world’s increasingly shaky energy situation. Minqui Li presents a through-going analysis of the global energy scenario from 2018-2050 based on the latest data, Kurt Cobb suggests that ‘peak oil’ maybe a process, rather than a event, while Chris Martenson issues a stark warning on the coming oil crash.
Only excerpts from the three articles are presented here – click on accompanying links to view full article
Why The Coming Oil Crunch Will Shock The World
What if we started by embracing these three facts?
- Fossil fuels have provided a supernova of surplus energy. One that has enabled literally everything and everyone you see around you to spring into existence.
- Fossil fuels are a very recent discovery for humans (barely 150-years-old). Half of our consumption of them has happened in just the last 25 years alone (due to exponentially increasing use).
- Fossil fuels will not last forever. They are finite and will someday peak and then decline, representing a once-in-a-species bonanza never to be repeated.
It’s beyond dispute that fossil fuels are 4/5ths of the current total global energy mix, that our use and dependence on them has grown exponentially over time, and that they are a non-rewable resource.
Among the fossil fuels, oil is, by far, the most critically-important to sustaining both our current level of technology and the human population. It’s how we move virtually everything from point A to point B and it’s a critical element for food production and distribution. It also remains absolutely essential to the manufacture and installation of alt-energy systems, like wind and solar.
Given the three facts above, it only makes sense that a responsible global society should have a credible and very publicly-stated energy strategy providing a road map for weaning itself from fossil fuels before they become prohibitively expensive/scarce.
But since we don’t have one, the alternative path we’re taking is to sleepwalk into the future with no plan for feeding 9 billion people or re-building a crumbled global infrastructure — let alone facing the additional challenges of running out of critical minerals, dealing with destroyed ecosystems, and being unable to field the necessary fuel and economic complexity to install a brand-new energy infrastructure measuring in the hundreds of quadrillions of BTUs. This BAU path will be marked by the three D’s: despair, demoralization, and death. (Is it any wonder that young people aren’t as inspired by BAU as their parents’ generation?)
So if instead we want a future that’s prosperous, regenerative and abundant, then we have to begin doing things very differently from BAU. And fast. (The best time to have started on this was decades ago.)
10 years after the oil price spike: Is peak oil a process rather than a moment?
….what if peak oil is a process rather than a moment, a process with a series of twists and turns filled with sometimes ambiguous and counterintuitive signals? If so, it might look something like what followed.
When the economy rebounded and oil prices rebounded with it, the peak oil thesis seemed reconfirmed. The International Energy Agency had noted in its 2010 World Energy Outlook (page 48) that the rate of production of conventional oil had, in fact, peaked in 2006 and that unconventional supplies would thereafter have to provide the world’s oil supply growth.
As it turned out, world oil production plateaued bouncing between 73 and 76 mbpd until late 2013. Not surprisingly, this constrained supply brought on high prices. In fact, the years 2011 through 2014 experienced the highest ever average daily prices for crude oil, higher than the average for the year of the price spike.**
This fact, however, was obscured by the fawning media coverage of increasing supplies of shale oil in the United States (properly called tight oil) which did little to stem the price rise.
One lonely voice, petroleum geologist and consultant Art Berman, pointed out that the companies drilling for this oil were almost all free cash flow negative—even as oil prices levitated over $100 per barrel and stayed there. (Free cash flow is operating cash flow minus capital expenditures.)
Berman said the economics just didn’t support bringing the shale oil out of the ground. But investors didn’t listen and kept handing new investment capital in the form of both equity and debt financing to the drillers. Without this capital the drillers would not have been able to continue growing their production since their operating cash flow from existing wells came nowhere near the amount needed to grow production.
Today, we know that Berman was right.
World Energy 2018-2050: World Energy Annual Report (Part 1)
This is Part 1 of the World Energy Annual Report in 2018. This author has developed world energy annual reports that have been posted at Peak Oil Barrel since 2014. The purpose of this Annual Report is to provide updated analysis of the current development of world energy production and consumption, consider possible scenarios of world energy supply over the 21st century, and evaluate their implications for global economic growth and climate change. This year’s Annual Report includes multiple parts:
Part 1 World Energy 2018-2050
Part 2 World Oil 2018-2050
Part 3 World Natural Gas 2018-2050
Part 4 World Coal 2018-2050
Part 5 Global Carbon Dioxide Emissions and Climate Change 2018-2100
Part 1 summarizes the general findings of this year’s World Energy Annual Report. Given the currently available information, world oil production is projected to peak in the early 2020s, world natural gas production is projected to peak in the 2030s, and world coal production is projected to peak in the late 2020s. Wind and solar power is projected to grow rapidly and account for about one-third of the world energy supply by the mid-21st century. Despite the rapid expansion of renewable energies, global energy supply and economic growth are expected to decelerate over the coming decades. By the mid-21st century, the energy-constrained global economic growth rates may not be sufficient to ensure economic and political stability for the existing world system. Although world carbon dioxide emissions are projected to peak before 2030, cumulative carbon dioxide emissions over the 21st century will be sufficient to result in global warming by more than two degrees Celsius relative to the pre-industrial time (assuming there will be no large-scale carbon sequestration programs).
Part 2 through Part 5 of this year’s World Energy Annual Report will be posted at Peak Oil Barrel in the coming months. Figures and tables are placed at the end of each section.
Our energy problem is about quantity, not just quality
Gail Tverberg, Our Finite World
Reading about energy today, it’s easy to get the impression that our energy problem is a quality problem—some energy is polluting; other energy is hoped to be less polluting. There’s a different issue that we are not being told about. It’s the fact that having enough energy – quantity – is extremely important, as well.
Understanding the world’s economy-energy conundrum as a video game
Gail Tverberg, Our Finite World
World leaders manipulate the world economy like a giant video game. The object is to keep it growing, but what do they do when the economy hits limits? They could take their foot off the throttle operated by low interest-rates and more debt. Or they could “take the wings off” the economy.
Globalization is reaching its limits; here’s why
We have identified two different limits to globalization. One has to do with limits on the amount of goods and services that developed countries can absorb before those imports unduly disrupt local economies. The other occurs because of the sensitivity of many developing nations to low commodity prices, because they are exporters of these commodities.
Brace for the coming oil, food and financial crash
Nafeez Ahmed, Medium.com
A new research study by HSBC on global oil supply shows that the bulk of the world’s oil production has peaked and is now in decline. Welcome to a new age of permanent economic recession driven by our ongoing dependence on dirty, expensive, difficult oil — unless we choose a fundamentally different path.