Peak Oil... Demand for it, that is
1 Apr, 2009 02:15 pm
It is demand for oil that may peak as governments adapt to the problems of global warming, security of supply and an amplitude of market volatility that could bring economic ruin to nations and then the world. Oil-demand may be reduced preemptively to the production peak (peak oil) through more efficient vehicle technologies and finding alternative energy sources. Ultimately electricity is seen as the best "supply vector" for delivering energy to users. Probably it is a game of "tag" between reducing demand and falling supply; whichever comes first will win-out.
Now, the assumption of relentless demand has been called into question in a new report entitled "The Beginning and End of Oil" by Peter Hughes, who is a director of Arthur D. Little's global energy and utilities practice. The main issues surrounding oil, climate change, security of supply, and an amplitude of market volatility that could bring economic ruin to nations and then the world, are lucidly clear. Rather than simply waiting in a spirit of foregone conclusion for these calamities to unfold, it is likely that governments will be forced to act preemptively to anticipate and provide alternatives, which will curb demand for oil.
It is a global energy-mix that is to be contrived, rather than a single solution, which there is not. The recent hike to $150 and then a crash to $30 for a barrel of oil hand in hand with the credit crunch, makes it clear to most governments that deliberately reducing our demand on oil is a policy imperative. Of all the energy-resources, oil is especially vulnerable since more than half of the world's 30 billion barrel annual count goes to fuel transportation. The absence of alternatives to oil-based fuels has cemented the outstanding stature of oil as literally empowering the engines of progress.
However, a chain of policy initiatives spanning the globe is encouraging more energy-efficient technologies throughout the transportation sector - whether on the road or in the air. High efficiency diesel engines and hybrid and regenerative breaking systems can extract more than twice the tank to wheels miles that conventional spark-ignition/petrol engines can. Meanwhile there are aircraft fuselage designs that promise savings of 30% on fuel costs, and high-temperature aircraft engines that recover energy more efficiently from fuel, so long as sufficient quantities of metals such as hafnium can be recovered to bring them to a proficient reality.
Peter Hughes, a director of Arthur D. Little's global energy and utilities practice, said:
"As the number of new policy measures implemented to reduce reliance on hydrocarbons for transportation reaches critical mass over the next 10 years, the world could see downward pressure on demand for oil and oil-products materialize much sooner than the [oil] industry would currently concede. Depending upon how quickly the transportation sector begins its migration away from oil, we could find ourselves at a tipping point in which demand for oil peaks much earlier than the industry currently anticipates, before going into long-term decline."
In the wavering scales of the energy-balance, (the report says that) oil and gas companies should reconsider the sustainability of their business models and accelerate their moves to spread into other sectors of the "energy value chain" (not a phrase I would use but is "management speak"). A greatly increased contribution from coal, natural gas, nuclear power and "other alternatives to hydrocarbons" (whatever they may prove to be) is to be expected.
The report concludes that electricity is likely to be the main supply vector for delivering energy to customers which will "create demand for multiple sources of clean power as well as the infrastructure to deliver it."
All in all, it is better to close the stable door before the horse bolts, rather than after. We will need to make the kind of changes outlined eventually, so let's begin making them now, while we still have enough conventional energy in hand to establish new paths. Probably we are involved in a game of "tag" between reducing demand and falling supply. Whichever comes first will win-out.
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Thus demand will always be higher than supply and oil depletion will continue at the same rate.
There are no alternatives to liquid fuels that power agriculture, industry and transportation. When transportation collapses, the power grid will fail as it depends on highways for maintenance. Without electric power, virtually nothing modern functions. We face catastrophe.
That sentence about no such thing really as "global peak oil" caught my attention. The ignorance about peak oil in the scientific and political world is alarming. The US peaked in 1970 even though Prudhoe Bay had not even come on line then. Global peak oil will be, or was, the point when global production peaked and began to decline. It simply does not matter when individual nations peak.
Peak demand will simply give some more time re. the inevitable supply demand shortfall.
Global peak oil will be when world oil production peaks or peaked, probably in 2008. The fact that some nations will have not reached their peak then will not change the fact that global oil production will have peaked.
My point is that the peak is not a single geopolitical event (but a summation taken over the production of different oil fields and nations)... and that has consequences in terms of world power, as I allude.
I note that fuel prices are set to rise now, which is potentially disastrous amid and reinforcing a weak economy. I agree (as usual) with Clifford that there are no alternatives to liquid fuels, certainly not on the shorter timescale, and that as we run out of them, we will be in an inexorably weaker position to shore-up our collective energy system.
It is a delusion that we can carry on living at the energy-budget we do now by some other miracle technology to replace oil. In summary, we probably need to look to low-energy, localised agriculture to keep all of us fed. Transportation will be the first casualty and that impacts on everything in industrialised societies.
Wake up selfish morons........cut right down to the bone now.......or have nothing at all in the future
However, once the consequences of the oil "peak" unfold, mere matters of economics look trivial.
I recall that Kurt Cobb (who writes on here) wrote an article about "Oil Triage" which makes a lot of sense - it is as though we are on the brink of a conflict... against our oil-abundant status quo. Let's try and minimise the casualties in the first place though!