peak oil and uncertainty of climate change 19992004 james w. murray school of oceanography...
TRANSCRIPT
Peak Oil and
Uncertainty ofClimate Change
1999 2004
James W. MurraySchool of OceanographyUniversity of Washington
with special acknowledgement to David Rutledge (Cal Tech) and Jim Hansen (Seattle)
BREST IUEM / LPO/ IRD
May 2010
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 — environmentally, economically, socially. What is needed is nothing short of an energy revolution.”
Today’s Conclusions
Evidence is strong suggesting that energy resource limitationwill be a serious issue.
Peak Oil has occurred or will occur soon.Why? existing oil fields are declining at ~5-7% per year (~5 mbd)New discoveries are not keeping up.
You will see nothing about this in the press or from the governments
Oil and Coal Reserves are much less than assumed by the IPCC.Even so production rate, not reserves, are what matter for society.
We know enough to see that Resource Limitation needs to at least be an IPCC Scenario
“geological limitation of oil, gas and coal will result in significantly less production of CO2 than assumed in the IPCC scenarios”
“uncertainty about climate change must include uncertainty about the source of CO2”
Some Definitions
IEA – International Energy Agency (International)EIA – Energy Information Agency in US Department of Energy (DOE)CERA – Cambridge Energy Research Association (Daniel Yergin)IPCC – Intergovernmental Panel on Climate ChangeSRES – Special Report on Emission SceneriosOPEC – Oil Producing and Exporting CountriesNon-OPECUSGS – US Geological SurveyMMS – US Mineral Management ServiceWEC – World Energy CouncilEWG – Energy Watch GroupANWAR – Alaska National WildlifeASPO - American Society of Peak Oil
Useful websites:www.theoildrum.comwww.aspo-us.comwww.energybulletin.netwww.peakoil.net
Production Today World Liquid Fuels = ~85 mbd (includes crude oil, lease condensates natural gas liquids, ethanol, CTL, GTL)World Crude Oil = ~74 mbd*
Recent History of Reports and Predictions2004 IEA to 121 mbd by >20302005 DOE Hirsch Report2005 IEA to 115 mbdby >20302005 EIA to 120 mbd by >20302006 IEA to 116 mbd by >20302006 EIA to 118 mbd by >20302006 CERA to 130 mbd by >20352007 GAO Report2008 EIA Projection 97 mbd2008 CERA to 112 mbd by 2017 to 118 mbd by 20302008 Price spike to $148*2008 IEA World Energy Outlook Quote “crossroads”2009 IEA Whistle Blower2009 IEA to 105 mbd2010 US Joint Operating Environment (JOE) Report2010 (Feb) UK Industry Taskforce on Peak Oil and Energy Security2010 (March) UK Peak Oil Summit with “Chatham House Rules”
Christophe de MargerieCEO Total SA2007 <100 mbd2008 <95 mbd2009 <90 mbd
May, 2005
To June 2010
The price of oil has increased almost continuously since 1999.
If oil gets too high the economy becomes unstuckIf oil gets too low new investment is halted
SRES A1 AIM scenarios expect $43 in 2020 then $73 in 2100
18.7% / yr
Ali al-Naimi – Sweet spot for oil prices ≈ $75But the price will be difficult to control.
Expect the economy to zig-zag in the future with the lows getting progressively higher
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 and temperatures– Summary
The UN Panel on Climate Change (IPCC)
• The UN Intergovernmental Panel on Climate Change publishes assessment reports that reflect the scientific consensus on climate change
• The 4th report was released in 2007 – Over one thousand authors– Over one thousand reviewers– Nobel Prize
• Report discusses climate simulations for fossil-fuel carbon-emission scenarios
• There are 40 scenarios, each considered to be equally valid, with story lines and different government policies, population projections, and economic models
AR5 will only have 3 scenarios
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A1 Image A1 Message
A1 Minicam A1 Maria
A1C AIM A1C Message
A1C Minicam A1G AIM
A1G Message A1G Minicam
A1V1 Minicam A1V2 Minicam
A1T AIM A1T Message
A1T Maria A2 ASF
A2 AIM A2G Image
A2 Message A2 Minicam
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 = GJ• In 13 scenarios, oil production is still rising in 2100• In none of the scenarios did oil production decrease because of
resource limitation• Today’s Crude Oil Production is 28 Gb y-1
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182 mbd
Based on Rogner , 1997
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A1 Image A1 Message
A1 Minicam A1 Maria
A1C AIM A1C Message
A1C Minicam A1G AIM
A1G Message A1G Minicam
A1V1 Minicam A1V2 Minicam
A1T AIM A1T Message
A1T Maria A2 ASF
A2 AIM A2G Image
A2 Message A2 Minicam
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
CO2 emission Scenarios
From ∑ Oil + Gas + CoalThese scenarios drive almost all climate change researchA2 = BAU
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
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1980 1990 2000
Pro
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Gb Saudi
Iran
Iraq
Kuwait
UAE
OPEC Oil “Proven” Reserves!
• Accurate reserve estimates for OPEC countries are closely guarded state secrets• Values for 1983 are probably accurate (for 1983)• 430Gb rise in reserves, no adjustment for 193Gb produced since 1980• These questionable reserves are 45% of world oil reserves used by IPCC!• Kuwait Example: 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 and Fields Peak --- Regions Peak --- The World will peak
Everyone agrees that world oil will peak – controversy on the date
A modellogisticdistribution
Examples: Rapid Depletion is Normal
MexicoWas the #2 supplier of oil to the USNow is #4
Cantarell from >2,000 in 2005to 860,000 in Jan 2009to 588,000 in July 2009
Both Mexico and the USare in trouble. Mexico:Sale of oil = 40% of federal budget
US:Net exports are decreasing fast
Mexico Net Oil Export
US Oil Consumption today is about 21 million barrels of oil/dayANWAR will not save us! US Production today is 5.5 mbd.
Hubbert’s Peak
• From Hubbert’s 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
Case Study:
Apply the Principals of Hubbert’s Modelto the US to see how this works
US Crude-Oil Production
• Production is bell-shaped, like the curves Hubbert drew• Average price after the peak is 2.6 times higher than before
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Price
Production
The model fit to the real data is not bad. The model predicts 1973. The real maximum occurred in 1970
Hubbert’s Model - US Case Study
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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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’s Linearization is that it uses past behavior of a system to indicate possible future performance
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Hubbert
USGSMcKelvey
Can we apply this approach to estimate ultimate global oil production?
Rate Plot from 2005:Maximum Cumulative Production (Qt) = 2165 Gigabarrels
½ Qt = 1083 Gb
Cumulative production of SRES A1 family = ~3400Gb at 100 to 126 mbd A2 family = ~2900 Gb and B family = 2790 Gb
World Crude Oil Production Peaked in May 2005non-OPEC Peaked in 2004Saudi Arabia peaked in 2005, Russia appears to have peaked
IEA stillpredicts an increase(May 19, 2009)
MBD
Year
From US EIA 2009
How will the shortfall called “unidentified projects” be met?
Who are the experts that IPCC turn to?Energy Information Agency (EIA) - DOEInternational Energy Agency (IEA) – ParisUS Geological Survey (USGS) - Washington
Their economic models for future emissions are driven by demand (not supply).
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 mbd ÷ 9 mbd = ~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
US
MiddleEast
Canadian Tar Sands
1.2 mbd in 2008; projected 2.4 mbd in 20204 barrels of water for each barrel of oil2 tons tar sands = 1 barrelBig energy demandEROI = ~6:1 gold (natural gas) to lead (oil)
surface mining (~20%)in-situ (~80%)
Hugh resource = 1.7 trillion barrels
Neither scaleable nor timely
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 (last update 1992) and SE Asia and FSU
See World Energy Council (WEC) Reports
We 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. Recent programs to assess reserves in limited areas using updated methods indicate that only a small fraction of previously estimated reserves are actually minable reserves."
from the National Academy of Sciences Report on Coal, June, 2007
The world’s proven reserves of coal are decreasing fast!
Whenever coal reserves are updated the reserve estimates are revised downward (significantly).
Not due to production, but rather more thorough geological surveys.
Example: World Reserves by WEC decreased from 10 trillion tons to 4.2 trillion tons in 2005
Example: Gillette in Wyoming from 20.9 billion tons to 9.2 billion tons (2009)
The energy content of coal mined is decreasing.
Types of coal (four types – different energy content)Anthracite (30 MJ/kg)Bituminous (19 – 29 MJ/kg)Sub-bituminous (8-25 MJ/kg)Lignite (5-14 MJ/kg)
The high energy coal is running out
US passed peak anthracite in 1950 peak bituminous in 1990
Total energy content of US coal peaked in 1998Total energy content of world coal should peak in 2025
Another Problem is Energy ContentIPCC reports energy units (ZJ)
42 GJ = ton of oil equivalent6.12 GJ = one barrel of oil
Energy Watch Group (2007) Coal: Resources and Future production
ReservesSo-called proven reserves are anything but.
Major new discoveries are unlikely
China (largest producer)55 yrs from 1992 at 1992 rates (now >3x faster)
EWG states that China will peak in ~10 yrs
China’s reliance on coal means growth will end!
USA (“the Saudi Arabia of coal”)Large Reserves but many are of low qualityand high sulfur
Volume will increase for another 10 to 15 yearsbut net energy will decrease Global Picture
Six countries hold 90% of reservesRarely is coal exported
The world coal energy peak will occur ~2025
Compare with IEA WEO scenarios Reference scenario is unrealistic Alternative scenario is feasible
Höök et al (2008)
Can we apply Hubbert’s approach to coal?
UK
Germany
Japan
Rate Plot for British Coal
Historical Projections for UK Coal
• Reserve numbers are available before projections stabilize• Produced 18% of the 1871 Royal Commission reserves + cumulative• Criteria were too optimistic ― 1-ft seams, 4,000-ft depth (Deffeyes’ law)
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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
From Aleklett
Many independent groups are coming to the same conclusion
David Rutledge – Cal Tech
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 (2009)“Blackout : Coal. Climate and the Last Energy Crisis”New Society Publishers
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1.6Tboe coal remaining
4.7Tboe fossil fuels remaining
Future Fossil-Fuels Production
50% in 2022
D. Rutledge
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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
D. Rutledge
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280
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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• profiles that come with the program are modified to use our 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 serious and soon!Existing scenarios and energy policies are based on emissions - not supplyProduction rate matters not size of reserves
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 Limitation will Buffer Economic Recovery.
5) Security Issue:Seven nations control 75% of world’s oil exports. There will be shiftsin global power and wealth
Once it is clear that oil production has peaked is there are reason to believe that exports will not be limited?
Conclusions: A slow-motion train wreck
We have built a world economy on the premise of endless, cheap fuel.
But we have reached the point where its production can no longer be increased.
By the end of the century, nearly everything will have to be powered byrenewably-generated electricity, not liquids or gases.
Scaling up renewables to take over fossil fuels, and transitioning all the infrastructure, is going to be mind-boggling expensive, difficult and slow.
There are three main issues that are usually underappreciated.
Energy Costenergy consumption = roughly 20-30% of the gross starting energy in the coal. One “carbon wedge” .TimingOnly 3 or 4 small scale carbon storage demonstration projects exist.
ScaleA storage volume of 30,000 km3/yr required. Niagara Falls = 50 km3/yr. We need to store 600 Niagara Fallsof liquid CO2.
Is geological CO2 sequestration (CCS) a realistic strategy?
See Science, September 25, 2009 issue of Science.
“Clean Coal” is an idea whose time will never come
Nobody can predict oil prices, but the pattern will be something like this.Demand surges will result in oil price shocksOil price shocks cause recessions and force reductions in demandThe average price of oil goes up over time
Demand destruction keeps the supply-demand in balance
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
5.7% is the key
The Price Elasticity of Demand has become virtually zero. It’s a supply limited market.
from Kenneth Deffeyes
Natural Gas – Shale Gas is overhyped!Shale Gas is the big news – in the US the Barnett, Haynesville, Fayetteville and Marcellus formations get the big news.
But while the initial production rates are very high the first year decline rates are extremely steep. Example below from the Barnett Fm. in Texas
Environmental issues (ground water contamination) associated with hydraulic fracturing (fracking) are a major issue. An exemption from the Clean Water Act is required.
Arthur BermanAt $7.00/Bcfrequires 1.5 Bcf.Avg Barnett = 0.95
Producers claim2.2 to 2.3 Bcf/well
Hydrofracing
Can there be economic growth without growth in energy?
David Fridley - LBNL
There is a connection between debt, oil prices and personal income
Regional Fits vs Reserves, Gt
Region Fits for Ultimate
WEC Reserves plus cumulative
Europe 155 195
US and Canada 141 316
China (with Japan, South Korea) 115 159
South Asia and Middle East 78 78
Russia 74 219
Australia and New Zealand 59 86
Africa 22 57
Latin America 19 19
World 663 1,129
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850 left to be mined
IPCC range is355 to 3500 in 2100
“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
The UK government is starting to get “Peak Oil”It is light years ahead of the US
Findings from UKERC report (Feb 2010)
1.Global oil depletion is well understood and well advanced2.Peak oil is inevitable. The timing is uncertain but the window is Rapidly narrowing and the range of possibilities is narrowing3. The quality of the reserves data is appalling, especially for the large OPEC producers4. The risks presented by oil depletion deserve serious attention. Prices will inevitably be higher
Energy Watch Group (2007) Coal: Resources and Future production
ReservesKey message is how fast they have been revised downward – 55% in last 25 yrsGermany (23 Bt to 0.18 Bt) and UK down by 90%
Counter to conventional wisdom
China (largest producer)55 yrs at current rates – but reserves not updated since 1992! So now 40 yrs but
at 1992 production rates *China is now a net coal importer.*
EWG states that China will peak in next 5 - 15 yrs
USA (“the Saudi Arabia of coal”)200 yrs of proven reserves! But many are of low qualityand high sulfur
Volume will increase for another 10 to 15 yearsbut net energy will decrease – due to transport and CCS
Global PictureSix countries hold 90% of reservesRarely is coal exported
The world coal energy peak will occur ~2025
Compare with IEA WEO scenarios Reference scenario is unrealistic Alternative scenario is feasible
*Key finding is that data quality is very bad.*
Net Export Production - Mexico
“It has been estimated that there are over 984 billion tonnes of proven coal reserves worldwide…This means that there is enough coal to last us over 190 years.” The Coal resource, World Coal Institute, 2005
Future Supplies are often discussed in terms of the reserves-to-production(R/P) ratio.
Sounds sensible but supply forecasts of nonrenewable resources based onR/P ratios are always wrong!
Three main reasons..1. Rates of consumption of energy are never constant - they increase2. It is physically impossible to maintain a constant rate of extraction until theresource is exhausted3. Reserves are not static, but can increase as a result of new discoveries andnew technologies or decrease due to better data.
Five independent groups have attempted an to determine when peak coal will occur.
Energy Watch Group (EWG), Institute for Energy, Aleklett (Uppsala University), Rutledge (Cal Tech)
The reserves to production ratio (R/P)
China – Coal Consumption Rates
+7% per year means double in 10 years
China: Exporter to Importer
150 Mt in 2010
• Mt = millions of metric tons• Production is now 16 times less than the peak, while the average
price after the peak is 2.4 times higher than before• In 1913, Britain exported 27% of its production, now it imports
74% of the coal it burns
UK Coal Production
• 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
Changing Perceptions of Peak Oil
During 2009 the most significant story about peak oil was published by The Guardian (UK) on November 9th
Whistleblower #1, still with the IEA, said "The IEA in 2005 was predicting oil supplies could rise as high as 120 million barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year [2008]. The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this. Many inside the organization believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further.” Such honesty isn’t tolerated by IEA member state USA, which apparently leaned hard on the Agency to bury this hard truth for years.
There was a similarly strong warning from a heavy-weight within the oil industry. Christophe de Margerie, CEO of oil super-major Total SA, had previously issued warnings about world oil supply constraints. In 2007, he stated that “production of 100 million barrels a day will be difficult.” He upped the ante during 2008, claiming that “world oil production would peak at or below 95 million barrels per day.” On February 10th, 2009, the CEO’s statement could have been issued by ASPO-USA: “world oil production may plateau below 90 million barrels per day.”
Oil optimists like Daniel Yergin and Michael Lynch pushed back against the peak oil story on op-ed pages of several major US newspapers. Reporters wrongfully continued to link peak oil to “running out of oil,” and to confuse reserves with production rate.
A fog of sorts still plagues the issue in the media.
Exponential growth in wind energy over the past 15 years has boosted energy from renewables to near 50 million tonnes oil equivalent per annum.
This shows the scale of the problem