energy policy oil peak gary flomenhoft. the “oil peak”
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Energy PolicyOil Peak
Gary Flomenhoft
The “OIL PEAK”
Source: Smil (1991)
0
25
50
75
100
1800 1825 1850 1875 1900 1925 1950 1975 2000
Composition of U.S. Energy UseComposition of U.S. Energy Use
wood
animal feed
coal
oil
gas
electricity
Per
cen
t o
f to
tal
ener
gy
use
World GDP and CO2
$1
$10
$100
$1,000
$10,000
$100,000
100010501100115012001250130013501400145015001550160016501700175018001850190019502000
World GDP Billions US$$
250
270
290
310
330
350
370
ATMOSPHERIC CO2
World GDPCO2 level
Energy Rate of Return
Energy Densities of Fuels
Fuel Energy Density (Mj/kg)
Peats, green wood, grasses 5.0-10.0Crop residues, air-dried wood 12.0-15.0Bituminous coals 18.0-25.0Charcoal, anthracite coals 18.0-32.0Crude oils 40.0-44.0
0%
20%
40%
60%
80%
100%
1850 1870 1890 1910 1930 1950
Fuel
DomesticatedAnimals
Labor
Work Done in the U.S. Economy, 1850-1970
The Epoch of Fossil Fuel Exploitation(after Hubbert, 1969)
0-5 -4 -3 -2 -1 +1 +2 +3 +4 +5
Iron inMiddleEast
StonehengeBuilt
Parthenoncompleted
Pyramidsconstructed
Mayanculture
Inquisition
BlackDeath
Magellan'sCircumnavigation
Steam Engine
100
200
300
Tri
llio
n k
wh
per
yea
r
Hubbert Oil Cycle
US Oil Extraction
US Oil Extraction
World Oil Extraction
Results- Various Countries
Algeria (EUR=26.09 BBO)
Mexico (EUR=65.0 BBO)
Norway (EUR=35.2 BBO)
Romania (EUR=7.3 BBO)
0.00
0.10
0.20
0.30
0.40
0.50
0.60
1960 1970 1980 1990 2000 2010 2020 2030 2040
BBO HistoricalProduction
PredictedProduction
0.0
0.5
1.0
1.5
2.0
2.5
1960 1970 1980 1990 2000 2010 2020 2030 2040
BBO
Historial Production
PredictedProduction
0.00
0.02
0.04
0.06
0.08
0.10
0.12
1960 1970 1980 1990 2000 2010 2020 2030 2040
BBO
HistoricalProduction
PredictedProduction
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1960 1970 1980 1990 2000 2010 2020 2030 2040
BBO
HistoricalProduction
PredictedProduction
World Oil Extraction
World Oil Extraction
World Oil Extraction
World Oil Extraction
Various National Patterns United States (EUR = 286 BBO)
02468
101214
1980 1990 2000 2010 2020 2030 2040Billion Barrels per Year
Production
Demand
USA – E.g.. of a net consumer
Venezuela – E.g. of a net producer
High reserves (~ 3000 BBO) and low economic growth scenario
Venezuela (EUR = 95.71 BBO)
0
0.5
1
1.5
2
1980 1990 2000 2010 2020 2030 2040Billion barrels per year
Production
Demand
Various National Patterns
United Arab Emirates (EUR=80.63 BBO)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1980 1990 2000 2010 2020 2030 2040
Billion barrels per year
Production
Demand
Mexico (EUR = 82.48 BBO)
0
0.5
1
1.5
2
2.5
1980 1990 2000 2010 2020 2030 2040Billion barrels per year
ProductionDemand
Mexico– E.g.. of a country that switches over from net producer to net consumer in the future.
U.A.E. – E.g. of a swing producer.
High reserves (~ 3000 BBO) and low economic growth scenario
Forecasting Oil Production
Source : US DOE (EIA), website.
U = ~ 3000 (mean estimate of the USGS 2000).
Peak Production = 2037
World Oil Extraction
World Oil Extraction
World Oil Consumption
World Oil Flows
•Julian Simon view: technological Julian Simon view: technological developments and human ingenuity will developments and human ingenuity will yield more resourcesyield more resources
–““Drowning in oil” Drowning in oil” The EconomistThe Economist, March 6, March 6thth--1212thth 1999, pp. 23-25 1999, pp. 23-25
•Colin Campbell, et al. use Hubbert curves Colin Campbell, et al. use Hubbert curves to predict the end of oilto predict the end of oil
–““The End of Cheap Oil” The End of Cheap Oil” Scientific AmericanScientific American, , March 1998, pp. 78-83 (Campbell and March 1998, pp. 78-83 (Campbell and Laherrere)Laherrere)
Two ViewsTwo Views
S. GS. Gürcan Gülen, ürcan Gülen, Ph.D.Ph.D.
Real Price of Oil since 1869
Real Price of Oil since 1869
Oil Reserve/Production ratio
Oil Reserves
“Proven” oil reserves
Natural Gas Reserves
Natural Gas Reserves
Coal Reserves
Hummer H1Sticker price $106,185
Current lawEquipment deduction $25,000Total tax deduction* $60,722
Bush economic planEquipment deduction $75,000Total tax deduction* $88,722
* Includes bonus tax write-off enacted by Congress in March 2002 and a deduction for normal depreciation.
Sources: Detroit News research, IRS, Taxpayers for Common Sense
Gas Hog Tax Credit
Cars per Thousand People
Source:
JustAuto.com
“Today there are 670 million vehicles in the world. By 2050 that number is expected to increase to 4.5 billion or maybe more.”
Thomas Gross, US DOE
China Energy use 1997
Source: EPA
American success
Great natural resourcesEnergy subsidies: slaves then fossil fuelsGlobal trade
Other Extinct cultures
Rapa Nui- (Easter Island)MangaiaMangerevaPitcairnHenderson
Exception:Tikopia