Monday 19 August 2013

SciAm on Energy Return on Energy Invested

The April 2013 issue of Scientific American had a decent interview with and overview of Charles A.S. Hall and his notion of Energy Return on Energy Invested (EROI).

A starter is to study and understand these two images:


The latter is from recent presentation on Energy Capital Cost Requirements by Michael Dale from ASPO conference 2013.

Bentley & Zittel on Limits to Global Energy Flows

At the recent ASPO 2013 conference, Roger Bentley and Werner Zittel gave a joint presentation on the limits to global energy flows mainly from oil, gas and coal.

Their findings are nothing new to those who have followed the PO debate for the past years, but bare repeating:

  • Global conventional oil peak is now (will continue for some years)
  • Global natural gas peak in c. 10-15 years
  • Global (hard) coal peak perhaps within a few years
  • Alternatives have much lower energy densities and returns
  • Prices will keep going up, may go down in the short term (due to economic hiccups)
  • Move to alternatives will put a stress in form of a  growth slowdown to the economy
  • Official & Industry sources (IEA, EIA, BP, OPEC) have been systematically wrong in their oil production estimates
  • We have plenty of reserves under ground, but we can't get to them fast
  • If we consume everything, we will create a lot of environmental risks & damage
And oh yes, official policy is still mostly in denial about all this in most countries. Apparently people believed the fracking fairy tales and the future of 1:1 substitution of oil with natural gas (over night). 

Ah well.

Monday 12 August 2013

The Economist admits it - We are at Peak

Yes, we are at conventional oil peak. Even the venerable The Economist admits in its August 2013 issue.

Of course, they can't do mea culpa, so they hide it as "peak demand", not peak production flows.

However, demand follows pricing, economic growth and policy decisions - and those are driven by basic oil field geology, not technology, not fanciful thinking or fairy tales about magical substitution.

At the time of writing this oil price (WTI) is at $106, at the time when the whole world economy is grinding to a halt again. Basic law of supply and demand -- if one believes in plentiful shale oil silliness -- would dictate a rapidly falling oil price. But this is not happening. The supply/demand margin is too tight. Supply is constrained, flow is at near peak - on an undulating plateau of maximum production. Unconventional liquids can only help this very modestly.

So, here we are - in 2013 and conventional oil production peak is starting to show it's effect. It will only get gradually more tight from here forward, with slight swings to the better and worse in the short term. The overall trend will be:

 - aggregate conventional production going down
 - prices going up
 - more swings in short term prices
 - more complaints about effects to world economy
 - more frantic investment in shale oil and tight gas (with mostly slow gains that fizzle out fast)
 - more instability in the Middle-East, more coups, more uprisings, more changes in power
 - more tensions between USA, Russia and China - all of which are gunning to get to the alpha dog position in the control of remaining conventional oil reserves (mostly in Middle East and in Africa)
 - more investment in natural gas and coal

Of course, this could all be wrong. We could just wake up, decide on a crash course to set things right, embark on worldwide coordinated conservations efforts and a plan to move off conventional oil dependency over the next 15-25 years or so. At the moment, the prospects for this kind of mass migration do not look good, but who knows - the future has a way of surprising us.

Here's to now. The only moment that matters. Use it wisely.