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Richard Heinberg (via the ABC): "Nothing governments can do about rising oil prices"
Posted by Big Gav on May 13, 2008 - 7:00pm in TOD: Australia/New Zealand
Topic: Supply/Production
Tags: australia, peak oil, richard heinberg [list all tags]
For those who didn't see it last night, Tony Jones interviewed Richard Heinberg about peak oil on the ABC's "Lateline" program.
Video - RealPlayer and Windows Media.
TONY JONES: Now to tonight's interview with Richard Heinberg. He's one of the world's leading experts on the phenomenon of peak oil. That's the point at which the world's oil reserves go into decline. The idea is that having reached its peak it's all downhill from there and there's evidence that global rates of oil discovery have been declining since the 1960s, and that new oilfields are becoming more and more inaccessible.
So as demand increases and supply decreases the price of oil goes up and up and up, as we've painfully experienced in recent years. No one really knows when we'll reach peak oil. It may have already happened, it may take another three decades. Why has the price of oil gone up so fast and so high in recent years? How much higher could it go and can anything be done to reverse this relentless process?
Richard Heinberg has written a series of books on the oil crisis including 'The Party's over', 'Power Down' and his latest 'The Oil Depletion Protocol'. I spoke to him a short time ago in Santa Rosa, California.
Richard Heinberg, thanks for joining us.
RICHARD HEINBERG, oil expert and author: My pleasure.
TONY JONES: Now let's start with the recent oil price predictions. Goldman Sachs is saying within two years oil could reach US $200 a barrel. Other analysts have a different view and say it could go down back to $40 a barrel. Where do you sit on this? What do you think is going to happen?
RICHARD HEINBERG: I think the price could lose some ground temporarily but over the long term there's nowhere for oil prices to go but up. And we could, in fact, see prices considerably above $200 a barrel within the next two or three years.
TONY JONES: What does this mean for governments like Australia? We're just about to have our Budget released in this country. The Federal, the new Labor Government came to power promising to try and do something about rising food prices in supermarkets and rising oil prices. It sounds like their hands are going to be tied for the foreseeable future?
RICHARD HEINBERG: Yes, I think that's true. I don't think there's anything that the Australian Government can do or the US Government can do about rising oil and food prices and by the way, these two things are connected. The rising oil prices create increased costs for farmers. Also the cost of shipping, food and just about everything else is increasing, so these high prices are going to have knock on effects through the economy. The airline industry is going to be hard hit and again, there's very little that governments can do other than to start planning for high oil prices. We should be redesigning our economies to operate with less oil. Fundamentally that's the only sane policy response. We can't just hope somehow for oil prices to come back down to $40 a barrel. It's not going to happen. ...
TONY JONES: Do we know the truth, though? The global oil industry has consistently revised oil reserves upwards over a period of time. It is estimated there's more than a trillion barrels left underground just from known reserves at the moment which would last for a considerable amount of time obviously?
RICHARD HEINBERG: Well, yes. If we could use those reserves at any arbitrary rate, the problem is oil is getting harder and hard tore get out of the ground. We've used the cheap, easy stuff. We've used the oil we could get from Texas and Oklahoma and even the North Sea and now what we're finding are oilfields in ultra deep water and places that are extremely difficult to access from a technical standpoint. We're also starting to get more from places like the Canadian tar sands where there's an enormous amount of resource in place, but it's not liquid oil. It's the stuff that has to be converted into synthetic fuel using enormous amounts of water and natural gas. Very resource intensive and environmentally ruinous process. So the easy glory days of the oil industry are over and just about everybody in the industry would agree with that statement.
...TONY JONES: I suppose that is the key question. If they were hiding behind the notion of peak oil that notion is terribly unclear, because we may have already passed the peak oil point or, in fact, we may not pass it I think you acknowledge yourself for another three decades which puts a completely different time scale on the whole event?
RICHARD HEINBERG: There are a few holdout analysts who are saying we may not see global oil production peak for two or three decades, but they're substantially in the minority these days and becoming ever more so. I think that the evidence is lining up very strongly in favour of a notion of a near term global oil production peak. For the last two years oil declines have led oil advances, I think a pretty good argument can be made that we're there right now.
TONY JONES: So in the meantime, how much pressure is there going to be to open up brand new areas for exploration, parts of the Arctic which haven't been drilled and even the Antarctic which currently where oil drilling and exploration are forbidden because it's considered to be a world park at the moment?
RICHARD HEINBERG: There is tremendous competition to gain access to these areas. Russia, Canada and some other nations are laying claim to areas of the Arctic to be able to drill there in the future. This is not very prospective area. In other words, from a geological standpoint it's very unlikely we'll find substantial amounts of recoverable oil in the Arctic, and I think it's a sign of the desperation of the industry that there's so much excitement about going into a place that will have unprecedented challenges from a technical standpoint just in operating there. We don't have the equipment that can operate in the Arctic. It's going to be decades before oil can be commercially produced there and yet, we see this enormous competition for access to the place. I think it's, as I said, a sign of desperation.
TONY JONES: At what point in the price cycle does it become economic to convert coal into synthetic fuel, gas into liquids, for example?
RICHARD HEINBERG: Well, the technology for turning either coal or natural gas into liquid fuels is already in place. South Africa has been turning coal into liquid fuel for many years. A company called Sassal operates in South Africa and produces 150,000 barrels a day. That's only a small part of South Africa's oil consumption. They use about 450,000 barrels a day. Even in the one country using this technology they're not getting even a majority of their oil from it. So it's going to take an enormous amount of investment to build coal to liquids plants. These are very expensive facilities to build. We're taking a low grade hydro carbon, namely coal, we're putting it through an intensive process that costs about 40 per cent of the energy in the coal to produce a expensive synthetic fuel. Again, it can be done. I think probably the US Department of Defence is going to go in the direction of coal to liquids but frankly I think it's unlikely we'll see a very large scale implementation of this technology, just because it is so expensive and it's so inefficient from an energy standpoint.
TONY JONES: Then you have the incoming problems obviously of the economic viability of doing that once you add into it the global warming costs?
RICHARD HEINBERG: Well, of course, yes. We're talking about again an environmentally ruinous practice. The Sassal plant in South Africa can be seen from space. It's the greatest single point source of pollution on the entire African continent and that's just 150,000 barrels a day and the world is using 85 million barrels a day of liquid fuel. If we were to try to replace any substantial portion of that with coal to liquids we would be looking at a climate doomsday scenario. ...
Heinberg didn't say anything new (the usual Heinberg stuff, plugging his protocol thingie) what's interesting is that he was presented as a credible "oil expert and author" in the mainstream media.
I think we might have a nascent peak oiler in Tony Jones. He uttered the words "Hubbert's Peak" in an interview with Joe Stiglitz last week.
Agreed. I posted it because it was interesting to see Richard on the TV - he hasn't really said anything new in quite a while - not that there is much need to as he is just explaining the basics to people who are probably new to the concept.
That said, I find myself without enthusiasm for the Oil Depletion Protocol - I don't think it will ever be adopted and I don't think it is the right way to solve the problem even if all necessary countries could be persuaded to adopt it. So rather than flog a dead horse its better to work out how to fix the supply side (ie alternative energy) as quickly as possible and let rising prices take care of demand...
Hi Big Gav,
Thanks for posting this.
re: "I don't think it is the right way to solve the problem even if all necessary countries could be persuaded to adopt it."
How come?
What is the downside it? (Are you saying there is one?)
re: "its better to work out how to fix the supply side (ie alternative energy) as quickly as possible and let rising prices take care of demand..."
Can you possibly elaborate?
Can the supply side really be "fixed", given the finiteness of the planet?
How do you/(we) move resources to alternative energy without also employing some conservation measure?
Or do you see conservation as unnecessary?
From whence comes the money/energy to introduce large-scale use of alternatives and how to do this?
In answer to your questions :
1. Why isn't it the right way / what is the downside ? Because it focuses on trying to get countries to agree to ration a depleting resource in a fair and equitable manner. For many countries it won't be in their interest to do so, so they will be motivated to subvert the system. Either it will fail, or it will need to be enforced in a heavy handed way. In the latter case, this means that you are focusing more attention and resources on the problem (decreasing oil availability) instead of the solution (finding efficiencies and substitutes).
2. How can the supply side be fixed given a finite planet ? The amount of energy available from renewable sources is more than 10,000 times our current consumption. There is also a lot of scope for making our use of energy much more efficient. Thus I don't see that there is any meaningful supply constraint, though there may be challenges ramping up replacements as fast as fossil fuels dwindle, depending on the peak date and decline rate.
3. Do I see conservation as unnecessary ? No - conservation is a very cost effective way of dealing with less energy. However it isn't the only way and there are limits to how much more efficient we can become in energy use or in "doing without" things we want or need.
As a broad brush description of how to solve our problems I'd say these are the important ones :
1. Adjusting building codes to make new buildings highly energy efficient.
2. In appropriate areas, making solar hot water and rainwater capture part of the building code.
3. Encouraging denser urban development, with better public transport (the whole "transport oriented design" paradigm, with a focus on building walkable neighbourhoods)
4. Moving to electric transport - both individual and public
5. Building as much solar, wind, geothermal, ocean and biogas based power infrastructure as needed. Build in enough storage to deal with any intermittency issues. Expand the grids and interconnect them. Make the grid smarter - manage demand to match supply instead of always trying to generate sufficient power to meet demand.
6. Increase the use of recycling, eventually moving to a "cradle to cradle" / "design for disassembly" / "internet of things" industrial paradigm, so that we can give up the current extraction based system of manufacturing.
7. Adopt various other efficiency measures as appropriate (cogeneration, increased vehicle fuel efficiency standards etc)
8. Work from home where possible.
9. Expand office opening times and work in shifts where possible. This can reduce traffic congestion which safes energy.
10. Reduce human population. IMO, without this, the other 9 are at best stop-gap strategies.
Hello All:
As I am a brand new user, I feel a little guilty about my first post, but I am compelled to respond. I have been vigorously study the energy/PO/alternative subject, trying to cut through the various agenda driven noise. I read the doomers, the pollyannas, the cornucopians and everything in between. I haven't decided where I sit but what is essential on this subject is verifiable, realistic data wherever and whenever possible.
Please, do not take this as a flame. My intention is exactly the opposite.
So, I must take exception to your statement:
"2. How can the supply side be fixed given a finite planet ? The amount of energy available from renewable sources is more than 10,000 times our current consumption."
By definition, a finite planet has a fixed supply side of energy. It consists of how many joules we receive every day and we can't use more than that unless we've stored some from the previous day's (or month's insolation)
From my studies, about 99%+ of renewable energy comes from the sun, and as of 2004, total energy consumption would make this factor less than 8200.
Am I being picky? Yes and no. If we are to wrap our heads around this problem, every number we use must be realistic and grounded. That said, whether it it some vague "more than 10,000" or a more specific 8200, it is a meaningless, potentially dangerous, cornucopian statement. I have seen it many times, so you are not alone.
What is our current solar consumption? As we enjoy the benefits of oxygen, and are relying on plants to provide us with it, while at the same time they are stopping our CO2 levels from not going through the roof any faster than they are, I would suggest that we are indeed using that energy and shouldn't mess with it.
The ambient temperature of the earth is almost entirely due to solar radiation, without which we would have a very cold dark orb, so I posit that we are using that energy, as is every member of the food chain.
The oceans, which comprise 4/5 of the planet is a solar driven food machine, starting at the smallest creature who thrive by photosynthesis and are the very foundation of the marine food chain. Further, temperature differentials that are responsible for moving nutrients via massive ocean currents are solar driven. As we avail ourselves of this bounty, that energy is off limits.
Every creature on this planet; herbivore, carnivore or omnivore survives as a result of what the sun provides, both in terms of food and water. For land creatures, every scrap of water that they use was distilled and delivered by, you guessed it, solar energy. We are in that group, from our millions of acres of direct food crops to millions of tons of plant life eaten by our domesticated animal. This planet is solar powered and always has been.
So, what is left for us? Frankly, I don't know, but as the earth is in relative equilibrium, I would say it is using just about all of it.
That doesn't mean that there isn't something left over for us, but what is our realistic supply? Again, I don't know, focusing on "realistic" values, any form of direct or indirect solar conversion must be in relative proximity to its consumption. This is a good thing, otherwise we could screw up our oceans more than we already have. Perhaps we could extract solar energy from the poles, and lessen ice cap melting, but that makes for a pretty long extension cord. :-)
Let me provide an example:
If we were to replace the energy consumption of the US using photovoltaics, (and I don't suggest we do), it would require we cover 21.8% of the US land mass with solar cells (Based on an average of 5KWh/m2/day and an efficiency of 25%).
I show this to highlight the staggering amount of energy that we consume.
So here are the two key questions:
How much is available to us?
How much can we realistically expect to harvest?
Whether you meant to or not, the statement in question implies boundless resources and further implies that it's all for the taking. When will we ever learn?
Please take this in the vein it was meant and if I have missed anything, feel free to jump all over me. We are dealing with some very large numbers here so between sig. figs and units, it's easy to make a mistake.
Cheers
You're not posting on a suspended artistic license, are you?
Let's see. 1*1017BTU * 1054.4 J/BTU = 1.05*1020 J/yr energy.
1.05*1020 J / 0.25 = 4.20*1020 J sun required (assuming all 100 quads are supplied as electricity)
4.20*1020 J/yr / 1.8*107 J/m²/day / 365 days/yr
= 6.39*1010 m²
= 6.39*104 km²
Looks like a square 253 km (157 miles) on a side. That's a long, long way from 20+% of the US land mass.
In practice, large amounts of that energy would be used as heat (low to no conversion loss) and the fraction used as electricity is counted some 3x in its portion of the 100 quads. Both the USA and Australia may be in bad shape, but a lack of solar energy doesn't figure in either of our troubles.
Right you are, still haven't figured out where I messed up. It's a factor of 15??? (mutter, mutter, mutter)
The World Resources Institute puts 2000 US total consumption at double your figure, so the required area would a minimum of 1.3e5Km2, or a square 357 km (221 miles)on a side, still not a trivial figure. Factor in conversion (DC-AC or electrolysis plus transmission costs) and add another 25% plus whatever increases over the last 8 years.
In some ways, this proves my point and a good raison d'etre for sites like this. If we don't have realistic data, we can't move forward logically.
Having wiped a little egg off my face, I still stand by my basic premise.
Yes, I know Oz has no solar shortage, I worked in the Simpson desert and the Strzleki Desert for 3 months.
I close, cheerfully busted
Back to your note about impact on the general environment, put PV on roofs and solar thermal plants in the desert.
I really can't see how we could have any meaningful impact on the environment if we did this (except for the benefit of shutting down all the coal and nuclear power plants).
We aren't going to change the albedo of the earth and the energy isn't "lost" - it will reemerge as heat somewhere down the track.
Yes, I agree, although heat (infrared) has a lower energy value than visible or ultraviolet light, it all goes to progressively lower energy levels. That's entropy for you.
The red and infrared spectrum does not contain sufficient energy for photosynthesis, but as you rightly point out, we have lots of desert and are making more every day.
My main point was the need for real data, and I think I have beat that to death enough. Secondly, I wanted to point out how much energy we consume and what sort of effort will be required to replace it.
Also, you are right to point out that PV will do nothing to replace petroleum distillates unless we use the electricity to generate hydrogen, which is a cruel hoax as a transportation fuel (IMHO), or further process the hydrogen into some sort of liquid fuel, which will do little to address CO2 emission issues.
As an interim or stop-gap measure, I don't understand why coal should not be used for electrical generation, providing scrubbers and CO2 sequestration are included. Perhaps I am naive, but I'm still learning.
As more and more countries "get it", I see a looming general resource crunch. If fossil fuel independence is possible, it will come at an enormous cost in money, natural resources and energy. Rather than hijack this thread, I will post my theory for all to pick apart once I am better informed.
Cheers,
PV (and any other form of power generation, preferably using renewables) will help replace oil if we transform our transport systems to be electricity based instead of liquid fuels based.
We need to do both things to deal with peak oil.
The EIA says the US consumed 104.8 quads in the last year on record, so you might want to see if WRI is doing any funny accounting.
"Two men say they're Jesus, One of them must be wrong." - Mark Knopfler.
Your reference to WRI implies that WRI is less credible than the EIA. Can you justify this?
At present I have no basis for believing one over the other, (or either one, for that matter) but the WRI does not detail its methodology as well as the EIA.
That said, I find it interesting that the link you provided showed:
- Fossil fuels jumped .06 quads due to notation f "Includes 0.06 quadrillion Btu of coal coke net imports.", which is not reflected in imports.
- Renewables jumped up .05 quads between input and the breakout after adjustments (deduction) and exports (deduction).
Not a huge jump, but still, unexplained discrepancies make me question the overall validity.
I will investigate more.
I agree ... its even less likely to be implemented than the Kyoto Protocol, which means very close to zero.
If we see $200, $300 or $500 a barrel in the next few years (and yes I think developed economies can cope with that without collapsing) the demand side will take care of itself, and there will be enormous incentive to develop alternatives.
Lets hope those alternatives don't include CTL, oil sands and shale oil.
Efficiency gains can preempt the need for oil in urban transportation.
Masdar is being built using Personal Rapid Transit. These systems can move car-size compartments using an electrical equivalent of 200 miles per gallon of diesel.
http://www.npr.org/templates/story/story.php?storyId=90042092
You really should just buy a banner advert on the site.
How much commission do you charge for banner ad sales kiashu ?
Seriously though, please don't spam thread after thread with the same message - eventually you'll become annoying, even if the thrust of your argument is generally agreed with.
Well - I wouldn't hold my breath - at the moment the signs are that efforts to ramp up all 3 are underway...
I'd like to see those getting a shot at good publicity speak more directly. When you have the time of a sound bite, it's got to bite. Explaining things such as discoveries vs. production really needs to be explicit. Too many people have no exposure to the issue and terminology. For example, saying something like, "We've found an average of n barrels a year since 1985 and have used up N barrels a year. We're depleting known reserves rapidly. Future finds will almost certainly be even less than over the last ten years while demand is still growing."
Or something like that.
And when he was asked and/or had it stated (2x, I think) that he agreed peak could be in 30 years, he needed a very direct, "No, that's not what I've said or believe." His answer was more gauzy, which leaves more room for people to miss it entirely or misinterpret it.
Cheers
Well there was Alan Kohler the week before... anybody who saw that should have started to connect the dots.
Thanks for the link.
I'm always amazed at how people can look at that graph and not instantly understand what we face.
Cheers
ABC, Australia isn't "mainstream" (no Britney Spears or wonder-bra stories found on THIS channel). But how to get your experts onto prime time? That's the big challenge.
As for any mention of Energy Security in our brand new government's National Budget, again zip! Indeed, the follow-up questions today from mainstream media on the ABC (yes, that's right, the same, non-mainstream channel) were also devoid of "$200 a barrel" talk.
Is it a conspiracy? What am I missing?
Well - I'd love to declare a conspiracy is at work, but I don't think its true in this case.
I think 99%+ of the population understand almost nothing about the oil market and will just accept the status quo until the (petrol price) pain gets too great for a significant number of them to bear.
At that point scapegoats and solutions will be demanded, and we might start to see some real action.
As part of one his an early questions, Tony Jones also mentioned (words to the effect), "some believe forty dollars a barrel is possible". Is it? Who are the "some"? Will those voices help carry the so-called peak in Mr Hubbert's Curve beyond what is a reasonable plateau - so the decline is that much steeper? So that any "real action" will come all too late?
Again, how on Earth do we get the PO message into the homes of the 99%+? If only to debate whether the notion PO has arrived or is still several decades away. Do TODsters have any influence? Can we start using it? For our children's sake... And their children.
I just don't get it. Why do we have to wait for the airports to close?
We just have to do it the old fashioned way I'm afraid. One person at a time. I leave calling cards whereever I go with the message "Peak Oil is going to change your life. Visit www.theoildrum.com and find out why and what you need to prepare for life after cheap petroleum" On the flipside is printed "If you think $1.50 a litre for petrol is a ripoff, just don't buy it. Adjust. Peak Oil will cause petrol prices over $3.00/L by 2010." Don't believe us. Go to www.theoildrum.com."
I especially love leaving them on petrol bowsers. But I leave them in librabry books, at cafes, any waiting rooms I visit. It feels kinda subversive but at the same time more of a practical action plan than just blowing off here at TOD.
You can get these printed pretty cheaply at Officeworks so it doesn't need huge expense.
Thanks DD, but I don't know. Sounds a bit... Not me?
Classic :-)
The correct response to that question would have been "Well, they're insane. Totally disconnected."
I don't think there's a conspiracy. It's just that people don't want to hear bad news in between Britneys latest car accident and what that Queer Eye fella is doing.
They're much more interested in what immediate, short-term benefits they'll get out of the budget (like the Au$31bn in tax cuts, or a Happy Meal each week) than genuinely pressing, long-term issues like Peak Everything.
This short-term thinking has infested the Australian mindset in an increasing amount recently. How much is due to the Government we've has for over a decade, and how much is due to everyone folling Americas lead on everything from 'entertainment' to car size, I don't know.
In case anyone's interested in further research, the name of the company mentioned in the article is "Sasol," not "Sassal."
The transcript got it right once and wrong once - not sure how they managed that.
CTL was discussed here recently:
http://anz.theoildrum.com/node/3817
It matters not whether Heinberg put his usual spin on things, it's that the discussion is being had on Australian television at all. Lateline is the kind of show that business leaders, politicians or the academia would watch and that could mean a lot more awareness in our decision making circles. I'm dissapointed I missed the show though, usually don't miss it. Damn that tiredness thing!
Bloody good show, I say. The interviewer might have asked some better questions, like what does it all mean, or where will it all end? But the media don't like viewers learning that things will get worse. Some blokes might get huffy and switch the channel, and down go the ratings and advertising revenues or underwriter contributions. Say mates, can you imagine Peak Oil on The Jim Lehrer News Hour here in the U.S.?
Actually the ABC is government owned and funded (like the BBC) - so no worries about cranky advertisers - they can be as gloomy as they want.
They get plenty of criticism from the conservative press of course, but that would happen regardless of what they actually said...
From what I have seen, the science programmes from ABC are high quality. The Crude programme which I have watched on the Internet was very good. The science on the BBC here in the UK has decreased in quality and quantity over the last few years. The Horizon programme which used to be very good is now mostly sensationalist.
"underwriter contributions." Often public media are the most conservative, like the Jim Lehrer News Hours, and National Public Radio, both of which have been a wasteland on Peak Oil.
If TOD wants to be mainstream it should be careful about who is mentioned in the discussion. some have very radical ideas.
http://peakoildebunked.blogspot.com/2007/12/318-richard-pol-pot-heinberg...
you actually compare Richard Heinberg to Pol Pot?
- Jesus you are a tool - why not go whole-hog and compare him to Hitler, I mean, if you are going to compare a guy to someone responsible for somewhere near a million deaths, why not go all the way?
you are shameless and reprehensible