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World’s top energy economist warns peak oil threatens recovery, urges immediate action: “We have to leave oil before oil leaves us.”

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"World’s top energy economist warns peak oil threatens recovery, urges immediate action: “We have to leave oil before oil leaves us.”"

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“Oil prices leapt above $70 a barrel Monday in Asia on investor expectations a recovering global economy will boost crude demand,” the AP reports.

You might call those investors speculators — if speculation can be based on marketplace reality.  The UK’s Independent opens its interview with Dr. Fatih Birol, the chief economist at the International Energy Agency (IEA):

Dr. Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.

peak_oil2.jpg

The warning is double worrisome because until the last year or two, the IEA had been a bastion of relatively staid and conservative and hence useless energy prognostication (like the U.S. Energy Information Administration still is).  Now the IEA and Birol have joined the fact-based alarmists, warning in its World Energy Outlook 2008, “Without a change in policy, the world is on a path for a rise in global temperature of up to 6°C” and proposing aggressive clean energy solutions.

The IEA’s work makes clear that for oil to stay significantly below $200 a barrel (and U.S. gasoline to be significantly below $5 a gallon) by 2020 would take a miracle “” or rather 6 miracles see “Science/IEA: World oil crunch looming? Not if we can find six Saudi Arabias!” and “IEA says oil will peak in 2020“).  As the Independent reports today:

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an “oil crunch” within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said….

The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong….

In its first-ever assessment of the world’s major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was “patently unsustainable”, with expected demand far outstripping supply….

Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.

In short, peak oil is nigh.

As a result of this analysis, Birol has gotten very blunt:

“One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day,” Dr Birol said. “The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously,” he said.

“The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future,” he said.

If you thought OPEC and the Persian Gulf producers were powerful before, wait until they control most of the oil market and have more than double their current revenues:

“If we see a tightness of the markets, people in the street will see it in terms of higher prices, much higher than we see now. It will have an impact on the economy, definitely, especially if we see this tightness in the markets in the next few years,” Dr Birol said.

So $4 and $5 gasoline — here we come.

“It will be especially important because the global economy will still be very fragile, very vulnerable. Many people think there will be a recovery in a few years’ time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices,” he told The Independent.

What needs to be done?  The only way to stop oil demand from outstripping the peaking of oil production is massive demand destruction, which is itself possible in only two ways.  The first way, pursued by the Bush administration, albeit (mostly) unintentionally, is to destroy the global economy.  Let’s call that the short-term “non-optimal” approach.

But as IEA has noted, we need to find 4 to 6 Saudi Arabias of oil.  See also “Merrill: Non-OPEC production has likely peaked, oil output could fall by 30 million bpd by 2015,” which noted,

Steep falls in oil production means the world now needed to replace an amount of oil output equivalent to Saudi Arabia’s production every two years, Merrill Lynch said in a research report.

A March McKinsey report concluded, “the potential looms for liquids demand growth to outpace supply creating a new spike in oil prices as soon as 2010 to 2013, depending on the depth of the economic downturn.”

The Obama administration certainly understands that “the equivalent to Saudia Arabia’s production every two years” can’t be found underground.

It can only be found in our grotesquely inefficient oil consumption.  Hence they have advanced the most aggressive increase in fuel economy standards proposed in decades “” Obama to raise new car fuel efficiency standard to 39 mpg by 2016 “” The biggest step the U.S. government has ever taken to cut CO2. As has the fastest-growing market for cars (see “China plans tougher fuel standards than U.S.“).

Hence the Administration has launched a massive push toward plug in hybrid electric vehicles (PHEVs) and pure EVs in the stimulus, the budget, and the climate bill (see “Why electricity is the only alternative fuel that can lead to energy independence“). As has China (see “World’s first mass-market plug-in hybrid is from “¦ China, for $22,000?“).  No surprise, then, that the major car companies are pursuing PHEVs (see Ford expects 10% to 25% of fleet to be electric by 2020, Toyota plans up to 30,000 plug-ins in 2012, GM to “do the heavy lifting” to help Obama meet goal of one million plug-ins by 2015).

Will all this effort be too little, too late to avoid $200 a barrel oil?  I think so.  But it may get enough technology into the marketplace by, say, 2015 that when we get really desperate and are ready to embrace a WWII-scale deployment strategy, we will have the commercialized solutions we need.  That is the best-case scenario right now.

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36 Responses to World’s top energy economist warns peak oil threatens recovery, urges immediate action: “We have to leave oil before oil leaves us.”

  1. Gary Thompson says:

    I looked at the peak oil graphics in Mobil’s head quarters in 1981. The bad news depletion date at that time was 1992. I know this may seem trite, but Saudi Arabia doesn’t release production reports in terms of proven reserves and new reserves reports.

  2. Lou Grinzo says:

    Let me chime in here, as someone who’s followed the peak oil situation very closely for about six years:

    1. The IEA keeps sounding the alarm about the oil situation, and the world keeps finding ways to ignore it. I honestly don’t know what they or anyone else can do to get the message across to consumers. I think of this every time I see a shiny, new Camaro or Gigundo 9000 SUV on the road; what will those people be doing in 2012 when their three-year-old vehicle costs over $120 for a fill-up?

    2. Birol should stop the “we will ruin out of oil” nonsense. We won’t, period. It will get too expensive to use in anywhere near the fashion we do today, that’s a certainty, and it’s why we won’t “run out”. We will either stop using it because we had the foresight to avoid the train wreck (zero chance of that happening), or we’ll stop using it because we tried to stick to BAU and it gets way too expensive.

    3. I hope no one here believes the nonsense I’ve heard countless times from my fellow enviros about how “peak oil will solve global warming”. It won’t. Not even close. If anything, it could give us an incentive to do something truly stupid, like converting massive amounts of coal into liquid fuels, which creates its own environmental mess.

    4. The good news is that we are indeed knee-deep in fruit that’s already fallen from the tree (speaking of potential conservation measures). People will complain, and the “drill baby drill” morons will make a lot of noise about how to “fix” the problem (they will be lying), but we can get by on way less oil than we use now.

    5. My current Big Prediction: It’s algae time! Within just a few years we’ll be making diesel and/or ethanol in pilot plants from algae, and once we hit the proverbial knee in the curve in technology and economics, we could potentially scale up that technology very quickly. I suspect that under extreme pressure from peak oil we would go from a shortage of petroleum to a steady supply of slightly less expensive (than $200/barrel oil) algae-derived fuels pretty quickly. And that actually would help climate chaos, as it would let us substitute a relatively carbon-neutral liquid fuel for one that’s really just a carbon delivery system connecting oil deposits and the atmosphere. I don’t expect to see it ramp up quickly enough to offset the incentive to turn to coal, however.

    [JR: Thanks for this. The article makes clear that peak oil doesn't solve the climate problem -- although I think it can help (as does Hansen). I think the jury is way, way out on algae.]

  3. pete best says:

    It is interesting to note that projections for global oil demand had expected a 50% increase from 85 mpd in 2009 to 110 mbd come 2030. This was always deemed by some oilists to be unattainable and instead the reality is that we are set to lose 30 mpd by 2020 instead. It does not matter how we sign up to cope with this phenomenon, existing on 55 mbd is going to be very hard in the present economic system.

    Lots of people might buy electric or hybrid cars but even then it will only accelerate their sales and from what energy source will this electricity come from? Not from renewables I would imagine.

  4. pete best says:

    Re #2, I like your assessment of the situation except for the algae, the 10,000 gallons per hectare optimism is nothing short of obtaining the finance type assessment. I doubt it will happen all of a sudden although the research seems plausible but not the yields stated.

  5. Brooks Bridges says:

    I read, in the last week, a reputable sounding person saying he thought we were also approaching the peak in oil demand. He did NOT say demand would fall below supply levels.

    If developing countries go directly to solar and wind who knows. China is determined to become energy self sufficient as fast as possible.

    We live in interesting times.

  6. paulm says:

    THis has been sitting on the timesonline site for some time.

    Impressive graphs…

    Why we’ll run out of oil sooner than we think
    http://www.timesonline.co.uk/tol/news/environment/

    Dr. Wirth points out that declining energy return on energy invested – in other words, the increasing amounts of energy “wasted” in the production of energy – mean that we have much less than “half” of the world’s oil deposits left.

  7. Scatter says:

    “Dr. Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted”

    I’d agree with that, but whose analyses did these governments base their non-policies on…?

    The IEA?

  8. Brian J. Donovan says:

    The issue, for advanced biofuel, is whether the proper development of an advanced biofuel industry in the United States is even feasible when: (a) independent ethanol producers in the U.S. are at the mercy of volatile commodities markets for feedstock; and (b) the price of ethanol is controlled by the oil companies.

    Read “Independent U.S. Ethanol Producers Will Not Survive as Price Takers” on the following page: http://renergieadvancedbiofuel.blogspot.com/

  9. Rick Covert says:

    The concerns this peak in production raises for me is this excerpt from the weekly Association for the Study of Peak Oil conclusion drawn by Steve Koonin, the chief scientist at the Department of Energy. He spoke at the Western Energy Summit. Here’s the ASPO excerpt, “The chief scientist at the Department of Energy, Stephen Koonin, warned the Western Energy Summit that moving away from fossil fuels will require a calibrated judgment about what projects should be pursued and in what order.

    Koonin maintains that there are simply not enough time and resources to let “1000 flowers bloom indiscriminately” and that carbon capture, nuclear, and biofuels should be the first priority. He would prefer that widespread adoption of electric cars be put off to concentrate on increasing the efficiency of internal combustion engines.

    He believes that the production of electricity using wind and solar will increase of its own accord but is unlikely to exceed 20 percent of US production. Nuclear and carbon sequestered coal will be needed to make up the difference.

    Koonin believes that resource constraints soon will force the Department of Energy to narrow its focus onto the most promising technologies.”

    ASPO keeps reinforcing the need for biofuels, nuclear and CCS in spite of the limited scalability or astronomical financial costs and long time lines to project completion even when wind turbine farms have proven so successful and concentrated solar thermal plants are already an off the shelf technology. They do this all while regarding the threat of global warming as an impediment to these projects without considering the impacts of global warming on basics like water and food. What’s going on here?

  10. This post mentions fuel-efficiency and hybrid electrics as the only responses to peak oil. But a recent study by Cambridge Systmatics shows that we can cut US CO2 emissions from transportation by 47% by 2050 purely through transporation policies (not counting cuts in emissions because of cleaner cars):

    “Examining about 50 transportation strategies, the report found transportation emissions could be reduced 24 percent by 2050 by acting to change travel behavior and land-use patterns. The emissions reduction hit 47 percent by adding road pricing techniques, ranging from pay-as-you-go insurance to charging Americans for every mile driven.”
    http://www.nytimes.com/gwire/2009/07/28/28greenwire-us-can-cut-half-its-carbon-emissions-from-tran-16812.html

    And these changes would make our neighborhoods more livable as well as reducing emissions. Compare the typical post-war sprawl suburb with the streetcar suburbs build 100 years ago or with the walkable suburbs being built by New Urbanists, and tell me which is more livable.

    Ray LaHood, Secretary of Transportation, is saying that the Obama supports what he calls “livable cities” – building neighborhoods where driving is not a necessity – as a response to global warming. This blog should also move beyond the technofix.

    (PS: To repeat something I have said before: I am in favor of plug-in hybrids, and I think it is inevitable that we will shift to them as oil prices go up, but we also should reduce the amount we drive, both as a response to global warming and as a way to make our cities more livable and our lives easier.)

  11. Bob Wallace says:

    Pete Best,

    You ask … “Lots of people might buy electric or hybrid cars but even then it will only accelerate their sales and from what energy source will this electricity come from? Not from renewables I would imagine.”

    Recognize that we are installing a lot of wind turbines and that the rate of installation is increasing. Additionally, the wind often blows more at night in some locales which means cheap power to recharge.

    Expect major increases in solar installation as prices plummet.

    The economics of fueling with electricity? Let me lead you through a little exercise using solar.

    The average American drives 12,000 miles a year.

    That’s an average of 33 miles a day.

    Taking a known vehicle, the plug-in Prius conversion, we find that it takes 0.26 kWh to power the car one mile.

    That’s 8.6 kWh per day.

    Now, we know that First Solar has begun manufacturing thin-film solar at or below $1 per watt. So let’s use a $2 per watt price to reflect installation cost, etc.

    Suppose we put all our thin-film in places such as New Mexico and Arizona where we average 5 solar hours per day.

    That means that we would need 1,720 watts of thin-film which at $2 per watt would mean an investment of $3,440.

    And that $3,400 would furnish all ones “gas” for the next 20+ years. That’s $172 per year or $14 per month.

    Now there are some non-included costs such as real estate and transmission in my simplification, but wind and solar are likely to get less expensive.

    [JR: PV remains pricey. Plus it provides power at peak times and isn't the obvious source for charging your car at night. It is wind that mostly blows at night that can provide truly cheap power for PHEVs. Also, don't forget the possibility of getting paid by the local utility for the value of having mobile electric storage. Some have put that potentially at $2000 a year per car.]

  12. pete best says:

    Re #12, all renewable energy being put in place today is to replace existing fossil fuel means of generating energy and to go for coal phase out. It is not to allow for oil phase out via electric cars as far as I am aware.

    The USA uses 20 million barrels per day and each barrel contains 1700 KWh or electricity equivilent. That represents an energy usage 3x higher than a days electricity.

    Just to let you know that you will require a lot of energy from many disparate sources to fill in that gap even with a 50% energy efficiency gain. The numbers are quite staggering.

  13. Mark says:

    I would think peak oil would be welcomed here. What is it they say? Necessity is the mother of all invention? $200 a barrel would cause a lot of necessity. Some of the responses have touched on the issue going beyond just transportation, to rethinking our concepts of communities. I’d love to be able to walk or ride my bike in my community and find most of what I need within a practical distance, let alone a safe and enjoyable distance. Trying to get support to redesign a community for that purpose right now would be tough, but gas at $6, $7 or $10 a gallon a lot more people would be receptive to change.

    As much as Cap and Trade may be a first step, pricing is what will be the big motivator to get people/communities to change. Either peak oil or a tax, both sould have the same effect. IMHO

  14. Ken Johnson says:

    Re “the most aggressive increase in fuel economy standards proposed in decades … The biggest step the U.S. government has ever taken to cut CO2″: I think most people don’t fully appreciate how aggressive those standards really are, or how much impact they will have on CO2 emissions.

    The standards will approximately match California’s Pavley standards, which were adopted in 2004 in response to legislation enacted in 2002. The standards were premised on a set of selected compliance technology packages for five representative vehicle types, which are outlined in a spreadsheet (TechCost tab) posted on CARB’s website. (The original data sources are cited in the cell-B3 comment.) All of the technology packages are fuel economy improvements, and the $-per-gal costs (i.e. technology cost per gallon of lifecycle fuel savings, 2004 dollars) are tabulated in column P for ten selected compliance technologies. The compliance costs range from $0.18/gal to $0.72/gal. Of course, manufacturers are not required to use those specific technologies; they can further reduce costs by using other technologies or by trading compliance credits. But according to CARB’s cost projections, compliance costs would be less than $0.72 (2004 dollars) per gallon of gas saved.

    But back in 2004 gas was selling for $1.74/gal in California, and it’s currently (7/27/2009) at $2.83/gal. So why do we need regulations to motivate people to pay up to $0.72 to save a gallon of gas? The problem is that they don’t see lifecycle fuel costs in up-front vehicle prices, and they don’t think much about the future when making their purchase decisions. However, differences in lifecycle fuel costs could be fully internalized in vehicle prices by applying a system of long-term, low-interest loans on fuel-efficient cars, financed by refundable fees on inefficient vehicles. The resulting economic incentive could easily be twice that of California’s emission standards and new federal standards.

    Regarding CO2 emissions, the new federal fuel economy standards will have no effect on national GHG emissions if transportation fuels are included in a federal cap-and-trade system. As Joe Romm has noted “The point [of cap-and-trade] is to achieve the economy wide savings that aren’t being captured.” Even if the net costs of fuel economy are negative, cap-and-trade will exploit fuel economy for the benefit of cost reduction (e.g., more coal combustion), not for the benefit of further GHG reduction.

  15. Bob Wallace says:

    #13

    EVs will be a gradual roll-out. Scrapage rates in the US are about 5%. Even with a large push from the government the rate of ICE replacement will be restricted by car manufacturing limits.

    Thin-film can be printed very rapidly in not-very-expensive “ink jet” machines such as NanoSolar is currently doing.

    Wind is going in fast and likely to increase greatly over the next few years. And prices are still on the way down which will even further speed the rate of installation.

    Give the average driver a personal vehicle option that costs about the same as an ICE vehicle and can be fueled for 1/4 or less cost and there will be even a larger market for power from renewables. That will mean more profit, investment, installation, and jobs.

    Between the mid 1930s and 1950 or so rural America was “electrified”. That was a pretty big job, and we got it done. And did that “WWII” thing at the same time….

  16. pete best says:

    Re #14, its a matter of timing. If oil peaks and then declines at 6-7% per year then that is a potenital issue of global supply and demand whihc might cause all sorts of nasty issues politically and economically globally. Countries are not very good at coping like this for being able to ration oil is not going to be much fun.

  17. Bob Wallace says:

    #14, sure it’s timing.

    Let’s say that oil supply declines faster than EV/renewable roll out. We’ll cut back on our driving (stay home, use public transportation, car pool) as we’ve shown we can do.

    And we’ll put a heck of a lot more capital into non-petroleum solutions as the greatly increased price of oil will create lots of excess profit.

    Oil isn’t likely to be rationed by countries. It will more likely be rationed by economics. Just as it now is.

    People with low incomes don’t drive much as a rule. Even people with high incomes but also high fuel prices find ways to cut back.

  18. Jay Turner says:

    Without some kind of carbon pricing, the run up in the price of oil is just going to motivate CO2-intensive alternatives like tar sands and coal to liquids. I welcome the higher oil price, since it will finally bring some sanity to America’s car-crazed consumer culture and might even motivate better land use. But it is very urgent that we give businesses the proper pricing signal so that they invest in clean alternatives instead of dirty ones.

  19. Brooks Bridges says:

    My apologies for a misleading earlier post on peak demand. I found the link:

    http://www.reuters.com/article/GCA-Oil/idUSTRE50J4WE20090120

    One quote from the article:

    “members of the Organization for Economic Co-operation and Development (OECD), such as the United States, Japan and western Europe may have peaked already, according to some analysts.”

    The article went on to say developing nations were expected to cause an increased demand overall.

  20. To repeat a question that I asked once before and didn’t get answered: How much would we have to increase our generating capacity to power our cars with electricity in addition to replacing current electricity use?

    My guess off the top of my head is 50% more capacity to power cars. Of course, that dramatically slows down the rate at which we can shut down old, dirty power plants as we build new, clean ones.

    That is why we need shift to cleaner cars and to drive less. Both are important.

    Saying that we should just build wind power and shift to electric cars, without reducing the amount we drive, is like saying that we should just build wind power and shift to electric heating for our homes, without insulating our homes to reduce the amount of heating they need to use.

    When it comes to home heating, everyone who is serious about global warming says we should do both. When it comes to driving, it is just as obvious that we should do both.

  21. from a new book, $20 Per Gallon, How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better, by Christopher Steiner

    “The mounting cost of gas will dictate cultural changes, housing changes, civic changes, education changes — it will leave nary a spot on the globe, or how we live, unchanged. There will be pain involved in our adaptations, yes, but not all of the change we face is gloomy. In fact, many people’s lives, including many Americans’ lives, will be improved across a panoply of facets. We will get more exercise, breathe fewer toxins, eat better food, and make a smaller impact on our earth.

    The changes to our society will begin at $6 per gallon and continue on from there, affecting things far beyond the kinds of cars we drive and how often we drive them. America’s obesity rate will fall. Mass transit will spread across the country. Plane graveyards will overflow. We’ll lose the option to cheaply travel by plane, but high-speed train networks will slowly snake state to state. Disneyworld will lock its gates, Las Vegas’ strip will shrink to half its size. Our air will be cleaner. Cities like Detroit, St. Louis, Pittsburgh and Milwaukee will revive at $12 per gallon, their streets rife with commerce, people and stores. The exurbs of America, where we’ve poured so much of our wealth during the last several decades, will atrophy, destroying the equity of those who held fast. Wal-Mart will go bankrupt at $14 per gallon and manufacturing jobs will return to the U.S. en masse. When gas reaches $16 per gallon, Michael Pollan will get the food world he lobbies for in The Omnivore’s Dilemma.”

    http://www.npr.org/templates/story/story.php?storyId=106695133

    I actually think he is too optimistic to think the change will occur automatically as oil prices rise. If we don’t have the political will to promote that change, Americans can can just shift to electric cars – which would mean that we would continue to be obese, to live in sprawl suburbs, and to shop at strip-malls, and that we will reduce greenhouse-gas emissions more slowly than we would if we built heathier cities.

    [JR: Nah. This scenario doesn't work. First off $200 a barrel is $6 a gallon. So getting above $10 a gallon is very, very hard -- too much demand destruction will occur before that price. Second, plug in hybrids and EVs mean that the suburbs and Wal-Marts will do just fine. Wal-Mart will have free renewable charging -- you can take that to the bank. The airline industry will not survive and anywhere near its current form,that is for sure.]

  22. Mike#22 says:

    Compact hybrids (Prius 2010) and compact clean diesels (VW Polo Bluemotion) will both be in the 70+ mpg range by 2010.

    We can cut transportation fuel use faster than oil production will decline. Plenty of good jobs churning out those oil independence machines. And the mass balance is attractive. One Gigundo 9000 can be recycled to make three Diminuendo 3000s.

    Mild PHEVs like the fleet only PHEV 2010 Prius can make a huge difference. There are plenty of smart ways to get the electricity. Wind, efficiency, etc.

    Also.

    Bob wrote: “Thin-film can be printed very rapidly in not-very-expensive “ink jet” machines such as NanoSolar is currently doing.”

    NanoSolar doesn’t appear to be doing anything except recycle news items on it’s website. Some group somewhere will turn the key on cheaper solar (soon I hope) but it doesn’t look like NS did.

  23. paulm says:

    time to buy oil shares…

  24. David B. Benson says:

    Plant Jatropha to easily refine into biodiesel. I know of large scale projects underway in South and Southeast Asia. From
    http://en.wikipedia.org/wiki/Jatropha
    the oil yields approximately 500 liters of biodiesel per hectare per year.

    [JR: Seems to me the latest word is that Jatropha has been overhyped. See Yale e360.]

  25. BBHY says:

    People always come up with the argument that we won’t have enough electricity to power all the electric cars.

    Well folks, refining oil into gasoline uses a heck of a lot of electricity. Valero’s Sunray Texas refinery uses 50 megawatts alone, and that’s not a very big one. That’s enough power to keep about 70,000 electric cars charged up.

    It takes about 7KWH of electricity to refine a gallon of gasoline. My electric car can go 25 miles on that much power.

    Consider also that if we stay on the fossil fueled transportation path, we’ll spend about $7 trillion on foreign oil imports over the next ten years. That’s money that leaves our economy so we don’t get to use it for our needs here. If we switch to electrics, we can keep that money. $7 trillion would buy us a awful lot of renewable power and grid upgrades.

  26. David B. Benson says:

    Still think Jatropha is a partial solution to the pressing problem of heavy transportation fuel; trucks, tractors, trains, ships and even airplanes. It certainly is working out well at the subsistence village level providing heating oil (for cooking) and running diesel powered electric generators for a few hours eacvh evening.

    But only a partial solution to “energy security” transportation fuel problem. Recently the US uses over 151 billion liters of diesel just for on-road transportation each year. At a somewhat optimistic 500 liters per hectare per year, supplying all of that would require 302 million hectares, 302,000 km^2. To compare, the State of Mississippi has a total area of but 121,489 km^2. So we’ll have to figure out a way to buy from Brazil and probably every country in between.

    While advances will probably be made in Jatropha and algae and … the fact remains that under ordinary growing conditions there are serious limitations to growing your fuel. Jatropha can be modified to perform better than it does currently. That said, current “wild” Jatropha is available now and appears to grow successfully, without many problems (so far).

    Other than other oilseed crops such as rapeseed, soybeans and palm oil (all foods), there is nothing else available now. So some Jatropha can help in kicking the fossil oil habit. Ain’t perfect.

  27. Jay Turner says:

    To answer Charles Siegel’s question: Almost NONE, at least not for a very long time, as long as folks charge off-peak.

    Source:

    http://www.rmi.org/images/PDFs/Transportation/RMIPHEV_decouple_AESP.pdf

    “Electric Utility Benefits
    Case studies have shown that with a regional7 PHEV market penetration of approximately 50
    percent, the total energy required for fleet charging would be approximately 10 to 20 percent of regional
    electricity generation (Denholm & Short 2006).8 Most consumers would likely charge their vehicles at
    night—during a utility’s off-peak period—when conventional electricity demand is the lowest, when
    electricity is the cheapest, and when most utilities have idle capacity. A conservative estimate of
    electricity capacity usage, estimates that 84 percent of the nation’s cars could be powered overnight
    using this existing capacity (based on an average vehicle miles traveled (VMT) of 33 miles) (Meyer,
    Schneider & Pratt 2006).”

  28. From Peru says:

    But which one will come first, “peak-oil production” or “peak-oil demand” ?

    In the first case oil prices will fall as people switch to other energy sources.

    In the second, we will see a rising oil price or maybe a series of 2008-like peaks and collapses (if a price over 100 $ a barrel is unsustainable and every time it happens a global recession will soon follows).

  29. Bottom line is the US needs an intelligent energy independence strategy that combines conservation, domestic production and an aggressive use of alternate sources (wind, solar, and nuclear). If we are not reliant on the OPEC nations then we can stabilize energy costs.

  30. David B. Benson says:

    Decimal point error in my comment #27. Growing Jatropha would require about 3,020,000 km^2 to meet current US on-road diesel demand. This is impossibly high; demand will have to be, in substantial part, extinguished.

  31. Excellent post Joe! On the subject of gas consumption, I’m working as an intern on the Drive Smarter Challenge campaign, which is designed to help consumers save money by adopting some easy fuel efficiency practices. Now more than ever, we should try to be conscious of the little things, like properly inflating our tires (improves fuel economy by up to 3%) and sticking to 60mph on the freeway (speeding above this drains your wallet and your gas tank).

    Check out our website at http://www.drivesmarterchallenge.org for more smart MONEY SAVING DRIVING tips

    Thanks for all that you do to keep us informed!

  32. As some have already pointed out there isn’t enough growing acreage for biomass based replacement fuels. I calculated the power of an acre and it was about 250 Watts at the wheel of the car driven by the resulting bio-fuel. Compare this to the sunlight’s power on the same acre, it’s thousands of times more!

    One thing that I haven’t seen mentioned here which is also discouraging is the shortage of lithium in the crust of the earth. Known reserves only last for one round of batteries to the current vehicle fleet! Sorry ’bout that!

    Other battery chemistries besides lithium could come to the rescue, but this is further into the future.

    So my conclusion is that we need to replace the entire car. That’s why I started the company Beamways in 2007, to design a comprehensive PRT system. PRT can solve many transportation problems, but sadly gets very little development funding as everyone is focused on cars and trains!

  33. David Levy says:

    Oil prices might temporarily jump to $200 a barrel, but at those prices, we’ll see compressed natural gas for cars (and Joe Romm knows there is plenty of natural gas), a lot more oil from tar sands and shale, and even some biofuels. Plus high oil prices are irrelevant for power production, and by themselves won’t drive renewables. So we cannot rely on high oil prices to drive the low-carbon economy transition.
    See The Age of Wisdom? http://climateinc.org/2009/09/the-age-of-wisdom/ for my critique of the high oil price disaster scenarios.

  34. grupa jurgena says:

    Welcome to the group Jurgen reading your speech as if the world had forgotten about the progress of work on new energy sources, no one talks about the future of new energy sources that can change our world, we believe we can succeed must be stronger than the flash of oil, which poderwie economy global faith in the tangible progress will affect the bottom of the crisis is the automobile industry is the spark that poderwie world economy will be turning point in our lives, which poderwie others believe that the train has already moved the global economy and we must all take

  35. Rick DeLong says:

    Time to start dismantling suburbia. No one really wants to live the suburban lifestyle anyways, with its long commutes, nothing to do within walking distance, and social isolation. Thank goodness for Peak Oil! It will finally correct the misallocations of the 20th century and give us the healthier lifestyle that we all want.

    It is also time for community action to start developing walkable communities with local food production. There is enough yard acreage in many suburban communities to support local self-sufficient food production. A good business idea will be tearing down excess rooms in suburban houses, using some of the materials to insulate the remaining rooms better and selling the rest. Everyone could be installing dry composting toilets and learning about permaculture. In the future roughly a quarter of us will need to be farmers of some sort.

    Time to learn from Cuba’s experience.