Peak Oil – The Implications

1. Peak Oil – The Implications Ceiliuradh 2009 Clifford Guest Tipperary Institute

2. Content • Peak Oil • What is it? • What is the evidence? • When will it happen? • Key Implications • Energy Implications for Ireland • Four Scenarios • Conclusions

3. 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

5. Peak Oil follows a bell curve, but demand only increases

6. What is the Evidence for Peak Oil? • The Hubbert peak • Peak discovery • No giant oil fields being found • Energy return on energy invested • More expensive to produce oil • Lack of spare capacity • Big oil fields are the oldest

7. What is the Evidence for Peak Oil? • The Hubbert peak • Peak discovery • No giant oil fields being found • Energy return on energy invested • More expensive to produce oil • Lack of spare capacity • Big oil fields are the oldest

8. What is the Evidence for Peak Oil? • The Hubbert peak • Peak discovery • No giant oil fields being found • Energy return on energy invested • More expensive to produce oil • Lack of spare capacity • Big oil fields are the oldest

9. North Sea Classic Pattern Peak to Peak = 26 years Denmark Norway & UK

10. World Discovery peaked in 1964 Smoothed with 3-yr moving average Past discovery by ExxonMobil 1981

11. What is the Evidence for Peak Oil? • The Hubbert peak • Peak discovery • No giant oil fields being found found • Energy return on energy invested • More expensive to produce oil • Lack of spare capacity • Big oil fields are the oldest

12. What is the Evidence for Peak Oil? • The Hubbert peak • Peak discovery • No giant oil fields being found • Energy return on energy invested • More expensive to produce oil • Big oil fields are the oldest • Lack of spare capacity

13. What is the Evidence for Peak Oil? • The Hubbert peak • Peak discovery • No giant oil fields being found • Energy return on energy invested • More expensive to produce oil • Big oil fields are the oldest • Lack of spare capacity

14. What is the Evidence for Peak Oil? • The Hubbert peak • Peak discovery • No giant oil fields being found • Energy return on energy invested • More expensive to produce oil • Big oil fields are the oldest • Lack of spare capacity

15. What is the Evidence for Peak Oil? • The Hubbert peak • Peak discovery • No giant oil fields being found • Energy return on energy invested • More expensive to produce oil • Big oil fields are the oldest • Lack of spare capacity Adapted from “The Oil Age is Over”, Matt Savinar

16. When Will it Happen ? • Significant variance in views • The only reliable way to identify the timing of peak oil will be in retrospect

17. 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

20. Reserves Growth

21. 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

22. Peak Oil – When ? • IEA Energy Outlook 2007 • Decline rate of conventional oil 3.7% • IEA Energy Outlook 2008 • Decline rate of conventional oil now 6.7%

23. 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 FatihBirol, Chief Economist, International Energy Agency http://www.guardian.co.uk/environment/georgemonbiot?page=9

24. Peak Oil – Implication #1 • The end of exponential growth, fuelled by cheap fossil fuel; • The Economy • Production • Consumption • The Population • Food Supply

25. “The greatest shortcoming of the human race is our inability to understand the exponential function ” Dr. Albert Bartlett Professor of Physics, lectures on Arithmetic, Population, and Energy

30. So have we reached the end of economic growth ? (as conventionally defined)

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

32. Crude Oil $80.36 - 23rd October, 2009

34. Peak Oil Implications – The Hirch Report • Previous 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

35. Peak Oil Implications – The Hirch Report • It 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

36. Energy Implications for Ireland

37. Source: SEI (2008) Baseline Total Primary Energy Requirement 1990-2020

38. Source: SEI (2008) White Paper Total Energy Requirement 1990-2020 Oil still at 55% of energy make up in 2020 in White Paper scenario

39. Energy Implications for Ireland • Need 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

40. Future Scenarios – D Holmgren (2009) Available at; http://www.futurescenarios.org/

41. 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

42. Brown Tech Lifeboats Destructive G Warming Slow Oil Decline Fast Oil Decline Benign Global Warming Green Tech Earth Steward Holmgren, (2009)

43. 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

44. Reasons to be Cheerful - Ireland! • Small population • Productive agricultural land • Island nation • Excellent; wind//bioenergy/wave/solar resources • Intact social networks • Well educated • Rural base

45. Conclusions • Peak oil follows a bell curve but demand only increases • Large 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 one • Can be seen as an opportunity to return to sustainable societies

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

47. Thank You For Your Time and Attention Clifford Guest Email: cguest@tippinst.ie