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Ex-Shell CEO and Peak Oil Researcher Face Off Over America’s Energy Future
Mose Buchele, State Impact (National Public Radio)
What happens when “drill baby drill” meets peak oil prognostication? An audience found out firsthand this week, when two power policy pugilists faced off at the University of Wisconsin.
In one corner was Texas’ own Dr. Tad Patzek, incoming president of the Association of the Study of Peak Oil, and Chair of UT’s Department of Petroleum & Geosystems Engineering. In the other corner, former CEO of Shell Oil Company and domestic drilling proponent John Hofmeister.
Highlights include Hoffmeister’s prediction that gasoline is likely to reach $5 a gallon this summer, and that America’s energy crunch will lead to new lows in political partisanship.
“We will look at the campaign of 2012 as lightweight stuff when we get to the campaign of 2016,” he said in his introductory remarks.
Hoffmeister advocates expanded domestic drilling in the U.S. to ensure American growth and security. “We live in a nation that has more oil than it will ever use,” he said, but without an aggressive drilling policy, he predicts US drivers will be waiting in line for gas by 2015.
Patzek agreed that gas prices are bound to rise, but he said they would go up even if all of the world’s non-traditional energy is developed. In fact, the higher cost of deep-water drilling, tar-sands refining, and shale oil extraction dictates that prices will rise, he said.
Dr. Tad Patzek is the Chair of UT’s Department of Petroleum & Geosystems Engineering .
“If I think about the United States,” Patzek said, “I think about a grown up baby who is now very large, and on a cold night wants to cover herself with a baby blanky. And no matter what she tries there’s always a part of her body uncovered and exposed to the cold weather. That’s where we are.”
Patzek’s solution is the same one he advocated in a recent interview with StateImpact Texas: the U.S. needs to “de-power.” That’s to say, Americans should begin using less power in their day-to-day lives to avoid an energy crisis as developing nations begin to use more of the global energy supply.
(17 February 2012)
Has the United States beaten peak oil? Not so fast.
Brad Plumer, Washington Post
In the past five years, warnings about peak oil have gained a lot of traction. U.S. oil production, after all, has fallen sharply since 1970. Global oil output has plateaued of late, even as China and India are demanding ever more crude. And that’s all caused prices to soar.
Yet the recent shale-oil boom in North Dakota has some analysts brushing off this gloomy perspective. A new research note (pdf) from Citigroup argues that the recent surge in North American production has “buried” the peak-oil hypothesis. New drilling technology has allowed companies to extract oil from once-inaccessible shale rock, which has, in turn, allowed the U.S. to slash its oil imports dramatically. What’s more, there are tantalizing shale deposits all around the world — in Argentina, Australia, and even France. So does that mean that, as the Citigroup analysts say, the peak-oil hypothesis is “dead”? Well, not so fast.
(17 February 2012)
A welcome voice of sanity in the MSM. -BA
Much ado about Hotelling: Beware the ides of Hubbert
Douglas Reynolds and Jungho Baek, Energy Economics
Abstract:
Much economic literature analyzes the Hotelling principal. Little economic literature analyzes the Hubbert curve although much controversy surrounds it. This difference in emphasis by economists needs to be reconsidered critically, and towards that end, we attempt to look at both concepts simultaneously. We test whether a simple Hubbert curve model is a significant determinant of world oil price changes and whether one of the main determinants of the Hotelling principle—the discount rate—also affects world oil prices. An autoregressive distributed lag (ARDL) bound testing approach is used to examine the effects of a Hubbert index variable and a Hotelling discount rate variable on the world wide price of oil. Results show the discount rate, the most important Hotelling variable, has little effect on oil prices, but that the Hubbert curve model does show a large effect on oil prices. Oil is a non-renewable natural resource par excellence, yet the results suggest that the Hotelling principle is not an important determinant for oil prices, yet the Hubbert curve and the theory surrounding the Hubbert curve is an important determinant of oil prices.
Highlights
► We question economists’ emphasis on Hotelling and lack of emphasis on Hubbert.
► We model a Hotelling and a Hubbert oil price model to see which better explains price changes.
► We find the Hotelling model insignificant and the Hubbert model significant.
► We explain the world oil price history.
► We show peak oil is causing oil prices to rise.
(January 2012)
Suggested by Mikael Höök at ASPO-International. He writes:
A recent publication in Energy Economics by Douglas Reynolds and Jungho Baek has analyzed the use of Hotelling and Hubbert theories as determinants for oil price. Their conclusing is that scarcity rent has little importance, while the Hubbert curve is a major determinant for oil prices.
¿Cuánto petróleo hace falta para extraer un barril de petróleo? (Charles Hall intervista)
Clemente Álvarez, El País
En 1900, con la energía equivalente de un barril de petróleo se podían extraer en EEUU más de 100 barriles de petróleo. Sin embargo, según estimaciones de Tasa de Retorno Energético, hoy en día con la misma cantidad de energía se obtienen menos de diez barriles en los pozos de este país. ¿Qué ocurre en el caso de los biocarburantes o la energía solar?
Se denomina Tasa de Retorno Energético (TRE) o Energy Return on Investment (EROI, o también EROEI) al cociente entre la energía obtenida y la utilizada para obtenerla. Este concepto surge de forma muy vinculada a la biología. El origen de la idea puede rastrearse en trabajos de distintos autores, como el ecólogo estadounidense Howard Odum. Pero es un antiguo alumno de este pionero en ecología de sistemas, Charles A. S. Hall, el que se atribuye ser el primero(1) en emplear este planteamiento en 1970, en su tesis doctoral sobre la energía utilizada por peces en sus migraciones. Igual que un ser vivo no debe quemar más calorías para alimentarse de las que va a obtener de la comida, Hall indaga en lo que ocurre cuando se aplica este cálculo en la explotación del petróleo o en otras energías en nuestra sociedad.
“Tú mismo eres todo energía, como lo son los ecosistemas españoles”, explica Hall, hoy profesor en el College of Environmental Science and Forestry de la Universidad Estatal de Nueva York. “Hice muchas mediciones de flujos de energía en la naturaleza y los sigo haciendo; los principios son fácilmente trasladables a las sociedades humanas si estás formado como científico de sistemas: todo está en las reservas, los flujos y los controles”.
Hace un siglo, los yacimientos de petróleo de EEUU eran mucho más accesibles que hoy en día.
(14 February 2012)
Roland Vially, géologue à l’IFP : “les hydrates de méthanes pourraient constituer une nouvelle source de gaz à l’horizon 2030”
Hugo Leroux, Industrie et Technologies
Les hydrates de méthane représentent d’immenses volumes de gaz naturel dormant sous les sols arctiques et les planchers océaniques. Entre janvier et février, le ministère de l’énergie américain et ConocoPhillips vont évaluer une technique d’extraction innovante consistant à récupérer le méthane par injection de CO2. Ces hydrates de méthane sont-ils le prochain eldorado des énergies fossiles ? Faut-il craindre l’exploitation de cette ressource non conventionnelle ? Eléments de réponse avec Roland Vially, géologue à l’Institut français du pétrole et des énergies nouvelles (IFPen).
Industrie & Technologies : Qu’est-ce que les hydrates de méthane ?
Roland Vially : L’activité biologique des sols produit en permanence du méthane par décomposition de matières organiques. Dans des conditions de hautes pressions et de très basses températures, ce méthane peut se retrouver piégé sous forme solide dans une cage de glace. Ce sont les hydrates de méthane. Sur Terre, deux types de régions réunissent ces conditions : les couches sédimentaires situées sous les pergélisols arctiques, et les fonds marins constituant l’ultra deep offshore, à partir de 500 mètres de profondeur.
… I&T : Si l’on parvient à exploiter les hydrates, l’épuisement des ressources fossiles, dont on parle tant, n’est donc pas pour demain ?
R.V. : Il faut différencier pétrole et gaz. Alors que l’on parle à raison du fameux peak oil qui marque le lent déclin des ressources pétrolières, en matière de gaz, on continue chaque année à découvrir des gisements. Aller chercher une ressource non conventionnelle comme les hydrates de méthane semble donc, pour le moment, très prospectif. Mais en matière de politique énergétique, d’autres facteurs entrent en jeu, à commencer par l’indépendance énergétique. Il y a dix ans, nul n’aurait envisagé une exploitation massive des gaz de schiste, jugée complexe. Les exemples américain, ou plus près de nous, polonais, montrent à quel point la donne peut changer.
I&T : Après les gaz de schiste, les hydrates de méthane seraient donc le prochain eldorado des énergies fossiles ?
R.V. : Il est toujours délicat de prédire l’avenir. Ils pourraient bien devenir une source d’approvisionnement, mais pas avant l’horizon 2020 à 2030.
(14 February 2012)
But also consider the warning from Ugo Bardi: Methane hydrates: the next communication bomb in the climate change debate. -BA
