Peak Oil – The Implications

Ceiliuradh 2009

Clifford GuestTipperary Institute

ContentPeak Oil

◦What is it?◦What is the evidence?◦When will it happen?

Key ImplicationsEnergy Implications for IrelandFour ScenariosConclusions

What is Peak Oil?

"The term Peak Oil refers to the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion."

Dr Colin Campbell

Peak Oil follows a bell curve, but demand

only increases

What is the Evidence for Peak Oil?

1. The Hubbert peak2. Peak discovery3. No giant oil fields being

found4. Energy return on energy

invested5. More expensive to

produce oil6. Lack of spare capacity7. Big oil fields are the

oldest

What is the Evidence for Peak Oil?

1. The Hubbert peak2. Peak discovery3. No giant oil fields being

found4. Energy return on energy

invested5. More expensive to

produce oil6. Lack of spare capacity7. Big oil fields are the

oldest

What is the Evidence for Peak Oil?

1. The Hubbert peak2. Peak discovery3. No giant oil fields being

found4. Energy return on energy

invested5. More expensive to

produce oil6. Lack of spare capacity7. Big oil fields are the

oldest

9

North Sea

0

2

4

6

8

10

1930 1950 1970 1990 2010 2030 2050

Dis

cove

ry G

b

0

0.5

1

1.5

2

2.5

Pro

du

ctio

n k

b/d

Classic PatternPeak to Peak = 26 years

DenmarkNorway & UK

10

World Discovery peaked in 1964

Past discovery by ExxonMobil

0

10

20

30

40

50

60

1930 1950 1970 1990 2010 2030 2050

Gb

0

10

20

30

40

50

60

Past Discovery

Future Discovery

Production

1981

Smoothed with3-yr moving average

What is the Evidence for Peak Oil?

1. The Hubbert peak2. Peak discovery3. No giant oil fields being

found found4. Energy return on energy

invested5. More expensive to

produce oil6. Lack of spare capacity7. Big oil fields are the

oldest

What is the Evidence for Peak Oil?

1. The Hubbert peak2. Peak discovery3. No giant oil fields being

found 4. Energy return on energy

invested5. More expensive to

produce oil6. Big oil fields are the

oldest7. Lack of spare capacity

What is the Evidence for Peak Oil?

1. The Hubbert peak2. Peak discovery3. No giant oil fields being

found 4. Energy return on energy

invested5. More expensive to

produce oil6. Big oil fields are the

oldest7. Lack of spare capacity

What is the Evidence for Peak Oil?

1. The Hubbert peak2. Peak discovery3. No giant oil fields being

found 4. Energy return on energy

invested5. More expensive to

produce oil6. Big oil fields are the

oldest7. Lack of spare capacity

What is the Evidence for Peak Oil?

1. The Hubbert peak2. Peak discovery3. No giant oil fields being

found 4. Energy return on energy

invested5. More expensive to

produce oil6. Big oil fields are the

oldest7. Lack of spare capacity 0%

5%

10%

15%

20%

25%

30%

1985 1990 2003 2004

SPARE OIL PRODUCTION CAPACITY

Adapted from “The Oil Age is Over”, Matt Savinar

When Will it Happen ?Significant variance in viewsThe only reliable way to identify the

timing of peak oil will be in retrospect

When Will it Happen ?Recent study by UK Energy

Research Centre (Oct, 2009)◦ Independent group◦ Academic attempt to reconcile the

polarised debate on the timing of peak oil◦ A review of over 500 studies, analysis of

industry databases and comparison of global supply forecasts

Reserves Growth

Peak Oil – When?

UKERC Report; “A global peak is likely before 2030 and there is a significant risk of a peak before 2020”

Richard Heinburg:◦ July 11, 2008 – Peak Oil Day◦High of $147/barrel◦Record 74.8 million barrels of oil per day

Peak Oil – When ?

IEA Energy Outlook 2008 ◦Decline rate of conventional oil now 6.7%

IEA Energy Outlook 2007◦Decline rate of conventional oil 3.7%

In an Interview with George Monbiot – 15 December 2008

“In terms of the global picture, assuming that OPEC will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau as well, which is of course not good news from a global oil supply point of view.”

Dr Fatih Birol, Chief Economist,

International Energy Agencyhttp://www.guardian.co.uk/environment/georgemonbiot?page=9

Peak Oil – Implication #1The end of exponential growth,

fuelled by cheap fossil fuel; The Economy

Production Consumption

The Population Food Supply

“The greatest

shortcoming of the

human race is our

inability to understand

the exponential function ”

Dr. Albert BartlettProfessor of Physics,

lectures on Arithmetic, Population, and Energy

So have we reached the end of economic

growth ? (as conventionally

defined)

http://www.youtube.com/watch?v=lDNMjV6sumQ&feature=related#watch-main-area

Crude Oil $80.36 - 23rd October, 2009

Peak Oil Implications – The Hirch ReportPrevious transitions were gradual

and evolutionary; oil peaking will be abrupt and revolutionary

The real problem is liquid fuels for transportation - motor vehicles, aircraft, trains, and ships have no ready alternative

Mitigation efforts will require substantial time - an intense effort over decades

Peak Oil Implications – The Hirch ReportIt is a matter of risk management -

early mitigation will be less damaging than delayed mitigation

Government intervention will be required - otherwise the economic and social implications would be chaotic

More information is needed - effective action requires better understanding of a number of issues

Energy Implications for Ireland

Baseline Total Primary Energy Requirement 1990-2020

Source: SEI (2008)

White Paper Total Energy Requirement 1990-2020

Oil still at 55% of energy make up in 2020 in White Paper

scenario

Source: SEI (2008)

Energy Implications for IrelandNeed more ambitious targets for

sustainable energy and delivery on the targets that we have

Using oil for heat and electricity generation needs to be phased out as soon as possible

Transportation sector needs to be electrified

Return to local & regional power production

Future Scenarios – D Holmgren (2009)

Available at; http://www.futurescenarios.org/

Future Scenarios

"... the characterisation of the four scenarios is difficult and inevitably SPECULATIVE, they do PROVIDE A FRAMEWORK for considering how Peak Oil and Climate Change could interact to reshape global and local energy resources, settlement patterns, economy and governance.“

D. Holmgren

Fast Oil DeclineSlow Oil Decline

Dest

ruct

ive G

W

arm

ing

Holmgren, (2009)

Brown Tech

Lifeboats

Earth StewardGreen Tech B

en

ign

Glo

bal W

arm

ing

Reasons to be Cheerful!

Our growth economy and culture of constant change is a strength as we face an uncertain future

There is evidence of effective (while challenging) transition away from cheap oil elsewhere i.e. Cuba

The harshest impacts of climate change may not effect Ireland

Reasons to be Cheerful - Ireland!

Small populationProductive

agricultural landIsland nationExcellent;

wind//bioenergy/wave/solar resources

Intact social networks

Well educatedRural base

ConclusionsPeak oil follows a bell curve but demand only

increasesLarge resources available but unlikely to be

accessed quickly and make a difference to a global peak

Uncertain timing but convincing evidence that it will be before 2020

Halt to exponential growth model in the world economy

Less an energy issue than a lifestyle oneCan be seen as an opportunity to return to

sustainable societies

http://www.youtube.com/watch?v=Ulxe1ie-vEY

Finally……………

Thank You

For Your Time and Attention

Clifford GuestEmail: cguest@tippinst.ie