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What Will Power Tomorrow?

Last night Australian current affairs program Four Corners ran a story titled ‘Peak oil?’.

It began with the proposition that we might run out of oil soon and that this could be catastrophic, but then went on to outline a range of alternatives. The program reminded me of all the useful comments in the thread following my blog post of March 8 ‘We will never run out of oil: Philip Burgess’.

Four Corners even quoted Brian Fisher from ABARE suggesting that we could liquefy coal at US$40 a barrel which is cheaper than oil from the ground now at US$70 a barrel. Of course, while it might be affordable, liquefying coal will generate lots of greenhouse gases.

I wonder how many greenhouse gases the other potential options will generate including solar, biofuels (ethanol and biodiesel including from algae), hydrogen fuel cells, CNG (natural gas/methane), oil from tar sands, oil from shale … What else could be used to power cars, trucks and tractors?

Give Sweden is confident it’s economy can become ‘independent of oil’ by 2020 I am confident the rest of the world will also manage beyond peak oil. The Swedes propose to run their cars on ethanol and generate electricity from ‘rivers and nuclear’.

Just today new environment group the Australian Environment Foundation [1] put out a media release stating that our energy future will be “volatile and unpredictable” and called for a “significant expansion of the federal government’s inquiry into nuclear energy, as the current review will not produce a sufficiently accurate or useful comparison between the various energy generating options.”

It’s fair to conclude that there will be a worldwide transition from oil to something else, but we don’t know how rough or smooth that transition might be, nor how imminent.
————————————————–

[1] I’m a director of the AEF.

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44 Responses to “What Will Power Tomorrow?”

  1. Comment from: Ender


    Jennifer – “What else could be used to power cars, trucks and tractors?”

    Electricity is one of the best options. With a critical mass of cars and trucks supplying a storage medium it makes it all the more easy to integrate large amount of renewable power in to the grid.

    I wrote a bit about it here – it is not finished yet.
    http://stevegloor.typepad.com/sgloor/2006/07/can_we_replace_.html

    I also wrote what I thought of the show:
    http://stevegloor.typepad.com/sgloor/2006/07/review_of_peak_.html

    The blank looks on the faces of the people from ABARE were priceless.

  2. Comment from: Ann Novek


    Hi Jennifer,
    Thanks for posting the article from Sweden.

    This is not my field, but heat pumps( ground source heat pumps/ geothermal heat pumps, exhaust air heat pumps and outdoor heat pumps) are very popular and energy saving and there’s an expanding market for these products.

    We have also our big rivers that are a major supply of electricity, but hey, hardly nobody wants more hydro power stations, they would spoil our remaining big rivers that we are very proud of.

  3. Comment from: Ann Novek


    Brian F. from Greenpeace International did this interesting statement:

    I’ve been reading about light bulbs. 90% of the energy that goes to a lightbulb gets lost in heat. According to Amory Lovins, the average US home runs 30 lightbulbs five hours a day, and if all American homes replaced just 3 of these bulbs with long-lasting bulbs, Americans could save electricity equivalent to the output of 11 fossil-fuel-fired power plants. In turn they would eliminate about 23 million tonnes of CO2 emissions per year – and save about $1,800,000,000.

  4. Comment from: Steve


    Jeez, if Brian Fisher reckons that we could liquify coal at $40 a barrel,then you could assume that the actual price will turn out to be more like US$100 a barrel.

    THis comment from Jen’s post is really the opening ante for a discussion of peak oil:

    “It’s fair to conclude that there will be a worldwide transition from oil to something else, but we don’t know how rough or smooth that transition might be, nor how imminent.”
    But Brian Fisher hasn’t even got to to this level.

    I found Brian Fisher’s sanguine attitude to ABARE’s incompetence and to future prospects as oil becomes scarce to be appalling – everyone agrees with him that as oil becomes scarce, prices will go up and the market will sort itself out. But as the comment I quote implies, the transition can be smooth or rough. Government action (and the forecasting that supports it) can either help to lessen the short term impact on actual real people, or else stand by and watch people struggle as the market delivers a price spike.

  5. Comment from: rog


    It would appear that $oil has more to do with politics than supply and demand – N Korea fires a few dud scuds and the $oil rises. From all accounts global stockpiles are at an all time high and supply is asured.

    Look at major oil producers; Russia, Mexico, Venezuela, Iran, Iraq, Nigeria – volatile, hostile and unpredictable.

    Ex Soros partner Jim Rogers today advised that oil will easily pass $100 bbl and that the commodities market had another 15 years bull run – he did caution that the run wont last forever. Increased profits should fuel additional investment in energy technologies and additional fields.

    http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=fundsNews2&storyID=2006-07-11T112136Z_01_L11520971_RTRIDST_0_ENERGY-ROGERS-INTERVIEW-CORRECTED.XML

  6. Comment from: Ender


    rog – “From all accounts global stockpiles are at an all time high and supply is asured.”

    For a little while. Light sweet crude probably has already peaked. The saudis have plenty of heavy sour crude however no-one want it.

  7. Comment from: Glenn Graham


    Hi Jen,

    An interesting observation that I have made since the last oil price shock has been the increasing price of petrol and diesel and how that has affected vehicle user’s behaviors.

    Since 2005 fewer people drive their own car to work, people are driving less kilometers and are planning better when they do drive.

    Conserving our oil energy is as simple as charging a annually incremented 20 cent per liter more for fuel over the price dictated by that of a barrel of oil. People will simply use less to save the family budget.

    OK that will have an inflationary affect which will hurt consumers in other ways (buying food for example) but we all need food but not the Sunday drive.

    The net effect is to force a reduction in oil energy consumption by ensuring smaller vehicles, better planned and shorter trips and moves to public transport. This would position us in the medium to long term by making alternative energy real financial propositions and smooth the financial and technological transitions from oil to what ever is next.

    The extra “tax” could pay for the additional infrastructure needed to service other energies (hydrogen pipe lines, electricity station…….)

  8. Comment from: Steve


    Hi rog,

    I can’t agree with you on the “It would appear that $oil has more to do with politics than supply and demand”

    Being a fanatical, religiously obsessed greenie zealot, I have been obsessively following the price of oil since 2004. Every week or so (every day when the price is up) usually at night in a dark room with only the blue glow of the monitor providing light, i sit, hunched over my keyboard. I visit http://www.oilnergy.com to see what the price is doing, and also search news.google.com for stories on oil.

    ITs true that things like North Korea contribute to the short term price spikes eg. making the price $75 instead of $60. Conflict with Iran, or Nigeria, or Hurricane Katrina, or someone blowing up a pipeline somewhere can also cause these spikes.

    But these spikes are occurring from off a high base too. If you smooth out price fluctuations shorter than, say, three months, the price of oil would start looking more like a straight line going steadily up from about $25 in 2004 to $70 now.

    While the short-term spikes might be caused by politics and stuff, the steady increase over several years is not. Surely it is supply and demand that is responsible for that?

  9. Comment from: Jim


    I actually thought that there was a cautious note of optimism in the program.
    Despite the acknowledgement that the days of the big oil fields were over ( or words to that effect ), most interviewees thought deep ( or deeper ) off shore exploration and drilling was likely to be fruitful.
    Same for shale oil and coal conversion.
    Of course that doesn’t solve the AGW problem but it probably isn’t time to panic just yet.
    Ender , why write off ABARE so cavalierly?
    They may have been wrong on some predictions but so have plenty of scientists/economists in the past.

  10. Comment from: Luke


    Issues seem to be:

    (1) bringing about a smooth transition to other sources of mobile energy – avoiding sudden shocks to the economic system
    (2) rampant growth of China and India – can we all have an SUV and make it work?
    (3) realising the relative inefficiency of oil sands/shale oil, biofuels etc.
    (4) realising that the long term cost of running private transport and cost of mobility is going to increase – our grandchildren won’t have as cheap mobility ourselves – problem with hybrids is the cost, embedded energy and disposal issues with batteries – how’s your Prius for reliability/maintenance costs at 150,000km??
    (5) therefore why build on good quality agricultural land and transport food and fibre longer distances than necessary
    (6) resurgence in rail??
    (7) overall quieter more local lives?

  11. Comment from: Peter


    One possible consequence of the increasing interest in renewable fuels will be the diversion of productive farmland from food production to ethanol and bio diesel production which in turn will impact on global food supply leading to more famine in the third world.

  12. Comment from: Geoff Henderson


    Lot’s of interest here, and like many of us, I suspect, I was embarrased by the ABARE “performance”. It seemed so devoid of reality or foresight. And it certainly lacked any urgency, which does seem to be lacking in much of the debate.

    I’m happy to be mocked for the following, because it’s an old myth, or Urban Ledgend, supposedly too good to be true. But if it is true, then it will change the world in a way that will dwarf the effect of both the first & second Coming. I don’t mean to be disrespectful, but under the circumstance of impending “no oil”, we should be prepared to re-visit even the most preposterous options. I stumbled onto this website page. Give it a try, take a moment to see the several video clips of engines running on water-based fuels. Now I’m a sceptic like anyone, but the vids are, at first look, convincing, and as I mentioned above, we should be looking at all options.
    http://www.youtube.com/watch?v=_NsRSAp18vI&mode=related&search=

    Actually, even if you scoff at the water fuel stuff, there is enough entertainment there to provide a perfect option to our TV.

  13. Comment from: fat wombat


    I think fluctuating world demand is the biggest factor on oil prices. In 2003, the world’s refining capacity went from oversupply to critical supply. This is reflected in the share price of Caltex Australia. In 2003, Caltex was $2; there was oversupply and refining margins were cut to the bone. On Monday, Caltex peaked at $25.75; world supplies of diesel and unleaded are very tight and Caltex has been able to make a good profit.

    I am using this example because oil refining was basically unprofitable 3 years ago. The refinery probably wasn’t making a loss but the return on investment was too small to justify any new investment. Part of the problem we have now is that the world is playing catch up. Demand has leapt a long way ahead of supply. How much of the shortage is due to lack of investment and how much is due to dwindling oil reserves?

  14. Comment from: Steve


    Lack of investment. . .

    So MARKET FAILURE is the reason for current high prices and shortages.

    And all we need to fix things is for the price to continue going UP so that the oil industry can justify further investment.

    So everything is easy! If you own a big SUV, there is no oil crisis, the solution is just to pay an extra $100 a week to fill the tank. of course!

  15. Comment from: Ender


    Jim – “Despite the acknowledgement that the days of the big oil fields were over ( or words to that effect ), most interviewees thought deep ( or deeper ) off shore exploration and drilling was likely to be fruitful.”

    Yes but these will only replace the depletion of the major fields.

    “Same for shale oil and coal conversion.”
    Shale oil needs natural gas. No gas no oil. It also used massive amount of water. Queensland has enough problems with water without introducing another problem.

    “Ender , why write off ABARE so cavalierly?”
    I am not writing them off just noting the absolute lack of knowledge iof the concept that oil might be limited. I am sure that they are certain that market forces can create oil.

  16. Comment from: SimonC


    I’m not sure it a lack of refining capacity that’s the problem. If it was wouldn’t we be seeing petrol, the end product, prices going up and the price of oil, the raw material, going down? If, due to refining capacity, you can’t process the raw material then the value of the raw material would be going down, not up…

  17. Comment from: fat wombat


    Refining capacity obviously isn’t the only issue with the oil price. Other factors include stockpiling ( USA has 12 months supply), a lack of exploration until very recently, political constraints and of course dwindling supply.

    Refining capacity constraints were a major consideration with Hurricane Katrina. When USA had some of its supply interrupted it was not possible to replace it all with imports.

  18. Comment from: Jim


    Ender,
    There was no suggestion that market forces could “create” oil – and you know that.
    Interesting that you dismiss expert opinion so quickly!

  19. Comment from: Ender


    Jim – “There was no suggestion that market forces could “create” oil – and you know that.”

    The quote was “if eggs were to increase in price then rooster would be laying them”. The point is that some people think that oil resources are only limited by the price per barrel. There are now also physical barriers to exploiting hard to get at oil resources so no matter how high the price gets we cannot get more oil.

    “Interesting that you dismiss expert opinion so quickly!”
    They have expert opionion in economics where other opinion from oil geologists differs.

  20. Comment from: Ender


    fat wombat – “Other factors include stockpiling ( USA has 12 months supply), a lack of exploration ”

    The USA strategic oil reserve:
    “According to the Department of Energy, as of April 2006, the current inventory is 687 million barrels (272.5 million barrels of Sweet crude oil and 415 million barrels of Sour crude oil. The current inventory is available on the SPR’s website. According to the World Factbook, the United States consumes about 20M barrels of oil a day; therefore, at maximum capacity, the SPR holds the equivalent of about 36 days of normal consumption.”

    “The Department of Energy’s report revealed a declined in crude oil stockpiles by 2.3 million barrels to 319.1 million last week. Despite the decline, the level was significantly higher than the “upper end of the average range for this time of year,”"

    So at 20 million barrels per day the USA has about 1.5 months supply of oil not 12 months.

    The lack of exploration was a factor however what drove some of this lack was the fact that so many more dry holes are drilled now. It is extremely expensive to drill dry holes especially now with the extreme shortage of rigs and the exhorbitant prices that are now charged for them. Rig counts are increasing in all major oil producing areas with no real increase in supply. A ‘major’ find in Mexico of 10 billion barrels has just been re-classified as a minor gas find.

  21. Comment from: Ian Mott


    At $2/litre I will fix my bicycle, I will get more exercise, I will lose weight, I will get fitter, I will live longer, I will get more things done, I will sleep better, I will notice more things as I pass them by, I will meet more people, I will be more relaxed and less grumpy, I will take more pleasure in my family as we ride together and, who knows, I may even get lucky.

    When I set out in 1979 to ride a bicycle from Singapore to Bangkok, bicycles had played only minor roles in my life before then. It took me three days to get up to 150km each day and a week for it to become routine. But the key to the adjustment was not fitness, but rather, all in the mind.

    At some point I stopped focussing on how big the task was and simply headed off to the local store for breakfast. And instead of going back home I went the same distance further on. I did the same at morning tea, lunch, afternoon tea and dinner and I did the same the next day and the next.

    I ate at roadside stalls and was welcomed into humble shacks, I slept on moonlit beaches and rubber plantations, I washed in creeks and rewarded myself with hot showers and a comfy bed from time to time. In the heat of tropical day and outrageous humidity, I provided my very own 15km/hour breeze to caress my temples. My lips were chaffed, my neck was sunburnt and my ass felt every single pothole.

    But there was never a single moment when I did not feel 100% alive.

    Now what, exactly, is all this about peak oil?

  22. Comment from: Ian Mott


    And every hill I climbed had a free ride on the other side.

  23. Comment from: rog


    I can imagine that on any bike trip Ender would be the one in the courtesy vehicle…..Ender when are you going to sell up your beach side home and build that eco friendly windmill?

  24. Comment from: rog


    “We have also our big rivers that are a major supply of electricity, but hey, hardly nobody wants more hydro power stations, they would spoil our remaining big rivers that we are very proud of”

    hey Anne, what about those people that dont have big rivers and nuclear power, what option do they have? (apart from burning dung)

  25. Comment from: Ann Novek


    Rog,
    Don’t you think that solar could be a major supply of energy in countries that burn dung, even my brother’s farm uses solar panels during some months every year in a cold and rainy country as Sweden.

    Think we have the technology already even if improvements have to be made. Wish technology high schools and universities invested more in science regarding energy efficiency and technologies.

    Personally I think energy efficiency is something we should invest in.

    Do you know for example if every person in Sweden changed their showers to more environmentally/ efficiency friendly ones , we could close down a nuclear reactor?

    So even small steps can make a difference.

  26. Comment from: Ann Novek


    My brother uses solar panels during some months and the rest of the year he uses wood pellets, we have them fast growing bush/small trees that is called “energy wood” that is used to pellets.

    Of course all those investments are quite expensive but in the end they will give you a profit.

  27. Comment from: hayden


    On the subject of Peak Oil, go to this site which theorises that oil is an abiotic product and is everlasting! Go to:
    http://www.questionsquestions.net/docs04/peakoil1.html

  28. Comment from: Ann Novek


    Regarding the shower, if you change the mouthpiece to a more environmentally friendly one you can close down a nuclear reactor.

    Now, I don’t mean that we should stop having a shower!

  29. Comment from: Ender


    rog – “I can imagine that on any bike trip Ender would be the one in the courtesy vehicle”

    Oh really rog – how would you know that now?

    BTW my suburban rig will be 12 KC130GT panels with a Blue Sky 6024 MPPT controller and a Trace SW3024E Inverter/charger. Going on about ‘windmills’ is only demonstrating your own ignorance.

  30. Comment from: Ender


    hayden – “go to this site which theorises that oil is an abiotic product and is everlasting! Go to:”

    All oil pumped out today was formed from biotic origin in 2 major periods of the Earths history when Gondwana was splitting apart.

    As far as I and all petroleum geologists on the planet know the abiotic theory is just plain wrong. Even if it was correct do you think that oil would be created at 83 million barrels per day?

  31. Comment from: fat wombat


    Ender, I was incorrect about the 12 month oil reserve figure. I obtained the information from a secondary source that is obviously wrong. Your figure is also incorrect. The Stategic Oil Reserve is only the emergency portion. The total oil reserves are 1734 million barrells or about 3 months supply.

    /www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/wpsr.txt

  32. Comment from: Ender


    fat wombat – fair enough I left out the petroleum stocks.

  33. Comment from: rog


    Any more talk of this Blue Sky 6024 MPPT controller stuff Ender and you will be rostered to the dung foraging team.

  34. Comment from: Richard Darksun


    What will happen to local food prices when BP, CALTEX etc will pay much more for your wheat, sugar, cooking oil then the local flour mill, woolworths store. Even now the “on special” price for cooking oil is only 30c/l more expensive than petrol from the bowser and even closer to the price of disel.

  35. Comment from: Ann Novek


    Rog,
    Don’t know if ” wood pellets” is a correct word in English -maybe it should be called chips.

  36. Comment from: Ender


    rog – “Any more talk of this Blue Sky 6024 MPPT controller stuff Ender and you will be rostered to the dung foraging team.”

    Sorry rog I should have remembered how nervous you get when any one posts facts, scientific arguments or accurate technical details.

    I will try to keep all futher posts to one syllable free market spin from now on.

  37. Comment from: Malcolm Hill


    http://www.energytribune.com/articles.cfm?aid=156

    Nothing to do with availability I know, but this suggests that the relative, or “perceived”, price of fuel has been falling for years, but is starting a correction .

  38. Comment from: detribe


    “One possible consequence of the increasing interest in renewable fuels will be the diversion of productive farmland from food production to ethanol and bio diesel production which in turn will impact on global food supply leading to more famine in the third world.”

    More likely taking subsidised EU/US crops off world markets and into biodiesel/biofuel cars, raising farm income returns for unsubsididsed farmers, including poorer farmers, lifting some out of poverty.

  39. Comment from: Ann Novek


    Bad news regarding biofuels.

    Cornell University’s study finds” that turning plants such as corn, soyabeans and sunflower into fuel uses much more energy than resulting ethanol or biodiesel generates.”

    http://www.news.cornell.edu/stories/July05/ethanol.toocostly.ssl.html

  40. Comment from: Graham Finlayson


    Not only that Ann, I’ve also read that it would take about 97% of America’s agricultural land to grow enough crops for them to totally replace their depedency on oil.
    A tight jeans scenario…
    (Doesn’t leave much room for the meat & veges.)
    Detribe, I thought you had been pushing the line that we needed the US & EU growing GM crops to feed the world….now you say we would be better off without them in the market at all!!
    Hmmm, am I confused or are you being very inconsistent.

  41. Comment from: Peter


    See: http://petroleum.berkeley.edu/patzek/BiofuelQA/Materials/062306ScienceLetters.pdf
    “The above calculations demonstrate that
    major reliance on biofuel, even for private
    motoring alone, would place an additional
    demand on agricultural production greater
    than would providing an adequate diet for 9
    billion people by 2050″. DAVID CONNOR1 AND INÉS MÍNGUEZ2

  42. Comment from: Steve Short


    In my view, the solution (at least for Australia) to both doing something responsible with respect to getting our CO2 emissions under control and provide a bulk feedstock for biodiesel/bioethanol to provide our transportation fuels at a tolerable cost is this:
    Algae absorb dissolved CO2 and bicarbonate HCO3- from water and respire O2. The gases from coal-fired power stations can be continuously scrubbed with a saline solution of (say) sodium/magnesium/ammonium carbonate which is recirculated sequentially though large lagoons that supports a massive ‘standing crop’ of algae. The water would enter the lagoons (warm!) at pH ~ 6.5 and leave at pH ~9.5. The growth of the algae would be controlled by the level of extractable CO2 (as CO2aq + HCO3-), the amount of nutrient N (absorbed from the NOx in the plant stack gases) and of course the influent temperature to the lagoons. The elevated temperature would accelerate algae growth. Even some fly ash produced by the plants could be judiciously added to the lagoons to provide the necessary phosphorus required. This would be an ideal retrofit technology for fly ash lagoons and cooling water lakes.
    The algae could be continually harvested at the outlet by (say) hydrocycloning and the clarified water returned to the stack gas scrubbers to complete the cycle.
    The harvested algae could then be sold for livestock feed, for making algae ethanol, oil from algae etc, etc.
    I estimate to service a 1 GW power station would require somewhere between 100 and 500 ha (1 – 5 km2) of lagoons. As you can see this is not complex technology. It is based on the simple principles that power utilities may/should be induced to donate their CO2, NOx and SOx for reuse for free and that biosequestration to a usable solid will always out-compete piping away to geosequester gaseous CO2 somewhere else.
    I am waiting for the day when a farsighted enterprise approaches one or two large coal fired power stations here in Australia and proposes this solution to their CO2 emissions problems.
    I’m sure, in the current ‘climate’ (pun definitely intended ;-) it would be possible to get a very cooperative deal with them.
    Original reference (as far as I can make out):
    AQUATIC BIOMASS RESOURCES AND CARBON-DIOXIDE TRAPPING
    CHELF P, BROWN LM, WYMAN CE
    BIOMASS & BIOENERGY 4 (3): 175-183, 1993
    Intensively managed microalgal production facilities are capable of fixing several-fold more carbon dioxide per unit area than trees or crops. Although CO2 is still released when fuels derived from algal biomass are burned, integration of microalgal farms for flue gas capture approximately doubles the amount of energy produced per unit of CO2 released. Materials derived from microalgal biomass also can be used for other long-term uses, serving to sequester CO2. Flue gas has the potential to provide sufficient quantities of CO2 for such large-scale microalgae farms. Viewing microalgae farms as a means to reduce the effects of a greenhouse gas (carbon dioxide, CO2) changes the view of the economics of the process. Instead of requiring that microalgae-derived fuel be cost competitive with fossil fuels, the process economics must be compared with those of other technologies proposed to deal with the problem of CO2 pollution. However, development of alternative, environmentally safer energy production technologies will benefit society whether or not global climate change actually occurs. Microalgal biomass production has great potential to contribute to world energy supplies, and to control CO2 emissions as the demand for energy increases. This technology makes productive use of arid and semi-arid lands and highly saline water, resources that are not suitable for agriculture and other biomass technologies.
    Sorry for the long post!

  43. Comment from: mala


    Give me details about wind mill industries growth in india from 2006 to 2009

  44. Comment from: Guru


    I know from my own experience that my car uses 30% more fuel when travelling in typical city stop start traffic than when cruising in free flowing traffic. And that is for a typical 2litre car. Think how much fuel is being wasted with heavy trucks in stop start traffic. Yet, every time I drive in Melbourne, Australia, I find myself stopping for traffic coming out of side lanes. In many cases it was clear that the busier road should have been given priority in a well sequenced traffic light system. If city planners only took more notice and rectified the system, it would save so much fossil fuel from being burnt and also get rid of the daily grid lock. Traffic lights sequence should be better optimised and more freeways and flyovers should be build to free the flow of traffic in cities.