Peak Oil and
Climate Change
1999 - ~$10/b 2008 - ~$147/b
James W. MurraySchool of OceanographyUniversity of Washington
IEA World Energy Outlook - Nov 2008“The world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable.”
with special acknowledgement to David Rutledge (Cal Tech)
AGU-Joint AssemblyToronto
26 May 2009
ConclusionWe know enough to see that Resource limitationNeeds to be an IPCC scenario
Outline
• The 4th UN IPCC Assessment Report SRES Scenarios• Oil Reserves• Hubbert’s peak
– The history of US oil production– How much oil and gas will the world produce?
• The Coal Question• Discussion
– Future carbon-dioxide levels– Conclusions
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2000 2050 2100
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A1C AIM A1C Message
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A1V1 Minicam A1V2 Minicam
A1T AIM A1T Message
A1T Maria A2 ASF
A2 AIM A2G Image
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A2-A1 Minicam B1 Image
B1 AIM B1 ASF
B1 Message B1 Maria
B1 Minicam B1T Message
B1High Message B1High Minicam
B2 Message B2 AIM
B2 ASF B2 Image
B2 Maria B2 Minicam
B2High Minicam B2C Maria
Oil Production in the IPCC Scenarios
• Gb = billions of barrels 1 barrel = 42 gallons = 159 liters• In 13 scenarios, oil production is still rising in 2100• In none of the scenarios did oil production decrease because of
resource limitation. None consider Peak Oil!• Oil production is never going to be more than today.
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What is Peak Oil?
It’s not about Reserves!
It’s all about the Production Rate!
We are not close to running out of oil
0
100
200
1980 1990 2000
Pro
ved
Re
serv
es,
Gb Saudi
Iran
Iraq
Kuwait
UAE
OPEC Oil “Proven” Reserves!
• 430Gb rise in reserves, no adjustment for 193Gb produced since 1980• These questionable reserves are 45% of world oil reserves used by IPCC!• A recent leak of Kuwait Petroleum Company documents showed the
actual reserves are only 48Gb (official reserves are 102Gb)• 1980 Kuwait reserves adjusted for production since then are 55Gb
From BP Statistical Review
Not provenby anybody!
Gb = billions of barrels
M. King Hubbert
• Geophysicist at the Shell lab in Houston
• In 1956, he presented a paper with predictions for the peak year of US oil production
Oil Wells Peak - Oil Fields Peak - Regions Peak - The World will peak
Everyone agrees that world oil will peak – controversy on the date
A modellogisticdistribution
US Oil Consumption today is about 20 million barrels of oil/day
ANWAR will not save us!
Typo:Million!
Hubbert’s Peak
• From his 1956 paper• Hubbert drew bell-shaped curves by hand, and added up barrels by
counting squares• For the larger estimate, he predicted a peak in 1970• Hubbert has been much criticized there is no consideration of
supply and demand curves, prices, or policy, and new technologies
US Crude-Oil Production
• Production is bell-shaped, like the curves Hubbert drew• Average price after the peak was 2.6 times higher than before
10
P/Q = mQ + aQ for which P/Q = 0 is 198 gigabarrels of oil. Also called Qt (maximum cumulative production)Half of this is 99 which occurred in 1973
A model for exponential growth in a finite system
The Logistic Curve or Rate Plot
Lower 48
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1900 1950 2000 2050
Cu
mu
lativ
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b .
Another Approach: Cumulative Oil Production
• EIA data from 1859• Fit for cumulative normal gives the ultimate production and the time for 90% exhaustion
90% exhausted in 2011
225Gb ultimate
31Gb remaining
Includes48 + Alaska
USGS/MMS assessment 189Gb
Historical Projections for US Oil
The power of Hubbert Linearization is that it uses past behavior of a system to indicate possible future performance rather than relying on the overoptimistic opinions of resource “experts”
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Hubbert
McKelvey
Maximum Cumulative Production (Qt) Will Be 2165 Gigabarrels
½ Qt = 1083 Gb
Historical Fits for World Oil and Gas Ultimate Cumulative
Ultimate Cumulative Production of Oil + Gas = 605 GtoeMaximum cumulative through 2100 for an IPCC scenario is
2,600 Gtoe 16
Who are the experts that IPCC turn to?Energy Information Agency (EIA) - DOEInternational Energy Agency (IEA) – ParisUS Geologocal Survet (USGS) - Washington
Their models for future emissions are driven by demand (not supply).
EIA, IEA and IPCC assume that supply will meet demandUSGS assumes much oil yet to be found
The EIA forecasts in 2008 projects a 30% increase in oil production between now and 2030 (from 85 to 97 mb/d) ( = +12 mbd).
The hard truth is that increasing energy supply at all will be difficult.
To have growth we need to balance decline of exisiting fields with discovery of new oil
Existing oil fields are declining at - 6.7% per year (IEA 2008)
For 2005 to 2030 the world needs 45 mbd of new production – just to maintain flat production
The projected growth requires discovery of 45 + 12 = 57 mbd of new oil!
Existing Oil Fields are in Decline
57 ÷ 9 = ~6+ new Saudi Arabias
The red box shows the average amount estimated to be discovered by the USGS each year between 1995 and 2025.
Urban Legend – we can drill more to get more oilOil discoveries have been declining since 1964
The world’s oil provinces have been well explored. Future discoveries will be limited to smaller structures and deeper formations
What about coal?
There are supposed to be hundreds of years of supply of coal!
Big 3 Reserves:US (27%)Russia (17%)China (13%)thenIndia, Australia, South Africa
Remarkably the data-quality is very poor globallybut especially for China and SE Asia and FSU
We also have a big problem with coal.The Reserves may not be as large as We’ve been led to believe.
"Present estimates of coal reserves are based upon methods that have not been reviewed or revised since their inception in 1974, and much of the input data were compiled in the early 1970s.
Only a small fraction of previously estimated reserves are actually minable reserves."
from the National Academy of Sciences Report on Coal, June, 2007
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• Mt = millions of metric tons• The average price after the peak is 2.4 times
higher than before• Britain now imports 74% of the coal it burns
UK Coal Production
Rate Plot for British Coal
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Projections vs Reserves for World Coal
• UN IPCC scenarios assume 18Tboe is available for production
Region Projection Gt Reserves Gt
Eastern US 37 96
Western US w/o Montana 33 79
Montana 68
Central and South America 16
China 88 189
South Asia 68
Australia and New Zealand 50 77
Former Soviet Union 36 226
Europe 21 44
Africa 16 30
World (at 3.6boe/t) 435 (1.6Tboe) 903
from D. Rutledge
• The scenario report SRES (2000) references the 1995 and 1998 WEC surveys• Downward trend in proved recoverable reserves• The IPCC chose to use additional recoverable reserves and they also chose
1998 (3,368Gt) instead of 1995 (680Gt) — additional recoverable reserves are now 19 times smaller than in 1998
Where Does the IPCC Get Its Coal Numbers?World Energy Council survey
Proved recoverable reserves, Gt
Additional recoverable reserves, Gt
1992 1,039 702
1995 1,032 680
1998 984 3,368
2001 984 409
2004 909 449
2007 847 180
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Many independent groups are coming to the same conclusion
Uppsala – Kjell Aleklett Peak Coal in 2030 (examples follow)http://www.tsl.uu.se/uhdsg/Publications/Coalarticle.pdf
Energy Watch Group (EWG-Germany) Peak Coal in 2025http://www.energywatchgroup.org/files/Coalreport.pdf
Institute of Energy (IFE)Kavakov and Peteves (2007) The Future of Coalhttp://ie.jrc.ec.europa.eu/
Richard Heinberg Post Carbon Institute (book in progress)http://www.richardheinberg.com/museletter/195
Historical fits for Oil, Gas, and Coal Ultimate Production
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Cumulative coal
Half-Way 2019
Reserves BP for oil and gas
WEC for coal
Cumulative oil, gas, and coal
Fits for ultimate
Projection
Projection
Ultimate Production of oil + gas + coal = 938 Gtoe
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2,000
2000 2050 2100
Cu
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lativ
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utu
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Comparing with the IPCC Scenarios
• This projection has lower emissions than any of the 40 IPCC scenarios• This is still true even with full coal reserves
Projection
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5
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2000 2100 2200 2300 2400
Fo
ssil-
Fu
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O2
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issi
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tC .
280
300
320
340
360
380
400
420
440
460
CO
2 C
on
cen
tra
tion
, p
pm
.
Carbon-Dioxide Levels
• Simulations with the program MAGICC from Tom Wigley at the National Center for Atmospheric Research (NCAR) in Boulder
• This program was used in the earlier UN IPCC Assessment Reports• The program modified to use Rutledge projection for fossil-fuel emissions• profiles are business-as-usual for other greenhouse gases
Projection
50% Stretch-out for Fossil Fuel Burning
460ppm
440ppm
1) Supply Limitation will be seriousExisting scenarios and energy policies are based on emissions - not supplyWe know enough to see that Resource Limitation needs to be an IPCC ScenarioPeak Oil has occurred or will occur soon. Coal Reserves are significantly less than assumed by the IPCC.
2) Coal is thought of as a solution to energy needs – This will be a disaster for climate change without CO2 sequestration. Is CO2 sequestration realistic?
3) Energy will pass climate change as the hot button issueWe have to get our energy plan in order before we can move forwardon climate change
4) Energy Supply will Buffer Economic recoveryRecessions correlate with price rise results in energy > 5.7% of GDPSee Jeff Rubin (2009) (formerly CIBC)
5) Security Issue:Seven nations control 75% of world’s oil exports. There will be shifts in global power and wealth
Conclusions:
James Hamilton (UCSD) – Recessions generally correlate with the price of oil.If energy expenditures rise faster than income, then the share of income for otherthings must decline
Oil Expendituresas a % of GDP
Energy as a buffer on economic growth
Summary Table: IPCC SRES versus Rutledge
All values given in Gigabarrels of Oil Equivalents (Gtoe)
1990 Identified Additional Additional Additional Cumulative Resources Recoveries w/Technology OccurrencesIPCCOil+Gas 120 + 612 = 732 262 (low) 679 (high) 690 >20,107 (with marine CH4 hydrates)Coal 124 + 545 = 669 1905 3571
Rutledge Ultimate CumulativeOil+Gas+Coal = 938 Oil + Gas = 605 (from 938 – 666)
Comparable to 732 from aboveCoal = 333 Comparable to 669 above
IPCC values in ZJ, converted to Gtoe using 42 GJ/toe and 0.5 toe/t for coalZJ = 1021 J For oil: 7.33 barrels per metric ton
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A1T Maria A2 ASF
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CO2 emission Scenarios
From Oil + Gas + Coal
These Scenarios drive almost all climate change research
MAGICC Simulations for CO2 and Temperature
• Written by Tom Wigley at the National Center for Atmospheric Research (NCAR) in Colorado
• This program has been used in the IPCC assessments• Simulation parameters
– IPCC “most likely value” temperature sensitivity: 3C/2CO2 concentration (“likely” range is 2.0 to 4.5)
– Aslam Khalil’s recent measurements for CH4 equilibrium concentration: 1,750ppb
– Tom Wigley’s P50 values (IPCC scenario medians) for other greenhouse gases: deforestation CO2 , N2O, NOx, VOCs, SO2, C2F6, HFCs, SF6
– Our projection for CO2 emissions from oil, gas, and coal burning.
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Economists say – as price goes up, more oil will be producedElasticity has become virtually zero. It’s a market where supply rules.
from Kenneth Deffeyes
Coal Resources for the IPCC Scenarios (Tboe), from Nakicenovic
Rutledge projection
IPCCMaximum scenario
use to 2100
IPCCReservesIdentified
Recoverable with technological
progress
1.3(at 3.6boe/t)
12
2000 4.0 14
WECProved
Recoverable Reserves
Additional Recoverable
Reserves
1998 4.0 13
2001 4.0 1.4
2004 3.7 1.5
2007 3.4 0.7
• IPCC scenario coal resources are based on WEC survey categories
• IPCC resources have not been adjusted for the new WEC surveys 38
Important Reading that will change your outlook
Matt Simmons (2005) Twilight in the Desert
James Kunstler (2005) The Long Emergency
Jeff Rubin (2009) Why the World is About to get a Whole Lot Smaller: Oil and The End of Globalization
Important web-site
www.theoildrum.com
“We are all extraordinary skeptical of the "peak oil" stuff. We know of no reliable information that suggests that we're going to be running significantly short of any fossil fuel in this century…It certainly won't happen with any significant price on carbon.”
“We've done a few 300-year scenarios that have some shortages in them, but even that may not be realistic. This is especially so with coal!”
“The Chinese say they have enough coal for centuries…The idea that we're only going to reach 450 ppm is not defensible, especially when we're already around 385 ppm. Do we really think there is only another 60 years of fossil fuel left? I don't think so.”
PNNL Climate Modelers
…but, see my figures!
“The scenarios are intended to exclude catastrophic futures that involve large scale environmental or economic collapses. In such scenarios GHG emissions might be low because of negative economic growth, but it seems unlikely they would receive much attention in the light of more immediate problems. Hence, this report does not analyze such futures.”
IPCC
Mad Max Excluded
Nested Assumptions
Energy scarcity is a myth
Fossil Fuels are superabundant
No reason to hoard or fight over them
Globally traded from haves to have-nots
Coal can be converted to anything
Fuel will remain cheap for a century
Supply versus Demand on International Market
See: www.gasbuddy.com
What controls the price of oil?
Backwardation – during price increaseContango – is not a place in Chile!
Tanker StoragePossible Driver of a Future Price Crash