Tuesday, 2 June 2009

Average Oil Production per Capita Declining since 1979

Over at dieoff.org, our goods friends are making much of the fact that up till 1979 there was a gradual increase in per capita energy production and then a decline for the first time in history.

In fact, this is not the case.
The first time in history there was a decline in per capita energy production was in the early middle ages just prior to the great plague. Europe's forests had been depleted and the cost of wood had soared. This was eventually overcome by the industrial revolution and the use of coal as a replacement for wood. During the transition period, however, there was some suffering and the global economy went through hard times.

It's likely that this time the coming decline in oil will be met by alternatives in both energy sources and substitutes at the end-use stage such as in electric transportation.

Returning to the point about declining world per capita from about 1979 (according to dieoff.org), the facts check out. On a global basis, there has in fact been a global decline in per capita energy production.

Taken at face value that sounds like it might be an "oh shit what do we do now moment".

I'm a natural cynic, however, so first I'd like to ask a couple of questions before I hope on over to LATOC to buy some ammo and some MREs and hunker down for the zombie apocalypse

While the global average has gone down, is the distribution of the decline uniform or is it uneven?
Even if it turns out that the distribution of the decline is uniform, does that mean due to diminishing energy production per capita, we now have less stuff per capita than the 1980s?

Well a quick and easy search from our friend google shows us that in answer to the first question the decline is not in fact uniform. Most of the decline is due to a flattening out of the world demand profile. We have added two billion people in the third world while the rich world (North America, Europe, Japan etc) have increased barely. The population of the United States has increased about fifty million while the population of Europe and Japan have declined slightly.
It's interesting to note that the rich world countries have dropped their per capita oil usage by around 10% on average. So I guess we must be doomed, huh?
The biggest energy hogs have been the OPEC countries and China, of which both regions have more than doubled their average per capita energy consumption.
So I guess they must be less doomed than us, right?

OK so how about the second question?
If we in the rich world and they in the third world are using less energy per capita does that mean we have less stuff because of less energy. i.e. less food, less big screen TVs, less cars, etc etc

Well as it happens the data are conflicting.
The two billion people added to the third world do in fact have less stuff. They have less food than they had before and their position is worse. Maybe they're overpopulated.

In the rich world, however, things are different. Though the per capita energy usage has declined on average (very slightly in the US, close to 10% in Europe and a little more in Japan), has the average amount of stuff gone up per capita in those three regions since 1979?

Why yes it has. All three regions are suffering from an obesity epidemic with the average per capita calory intake going from 2500 in the 1970s to 3500 today.
Likewise, the GDP of all three regions has increased massively. More than doubled in fact.

But how can this be?
The answer is efficiency.
In all three regions, the amount of energy used per unit of GDP has declined substantially. The Japanese are the most efficient, the Europeans next and the North Americans last.

What does that mean?
It means that energy belts can be tightened and the economy can grow even while the net energy per capita is declining. This is particularly true in North America where we still drive enormous vehicles with ridiculously low miles per gallon for fuel consumption.

Monday, 1 June 2009

Hirsh Report Liquid Fuels Shortage Debunked

More on the "no substitutes" bit.
So let's imagine for a second that oil production starts falling off a cliff next Wednesday.
The typical gleeful response of the dieoff crowd would be: "there are no substitutes to oil" and thus the transportation network will collapse and then the lights will go off etc etc and WE WILL ALL DIE.

The Hirsch Report, which is a little more reasonable than the sackcloth and ashes crowd over at dieoff.org, says "if we do not mitigate there will be a liquid fuels shortage especially in transportation after we peak".

Unfortunately for this premise, however, is one little fact: We have an ENORMOUS GLUT of shale gas and gas is a good substitute for oil, especially in transportation.
Estimates are that shale gas reserves are up to five times the "conventional" reserve which did in fact peak and start declining in North America about 8 years ago and now Europe.

Now what about those pesky substitutes? Can we run our transportation fleet off of natural gas? Is there infrastructure in place to do so? Will all our delivery vehicles stop running because we're "out of oil" since the party is over?

Well seems to me that the local gas utility runs their maintenance fleet of vans and trucks off of Nat Gas. Also seems to me that every second gas station is ALREADY SELLING Nat Gas.

I've also seen a ton of taxi cabs running off of natural gas.

So how much does it cost, exactly, to convert your car to run on natural gas?
All of about four grand.

Now I personally like electric transportation and conservation as the long term solution to peak oil induced transportation bottlenecks, but you can hardly argue with a massive glut of natural gas and such low conversion costs.

Oh yeah. There's also gas to liquids. Such as gas to aviation fuel. I wonder if now is a good time to buy airline stocks.

Now where does that leave us?
Well if we try to peak into the crystal ball of "life after depletion" it seems that we have at least three sustitutes with which to mitigate so while the steepness of the conventional curve cannot be flattened, we can substitute out the end-uses.
Conservation "take the damn bus".
Electrification "take the damn electric bus" and "look at me go fast in my new Tesla".
Conversions to run your car on nat gas "Oh look, it's only a buck twenty for a gallon of nat gas".
Gas-To-Liquids "Kunstler says we can't run the interstate truck fleet without diesel. Maybe not, but there's no reason we can't run our interstate fleet on gasoline trucks converted to nat-gas".

So yet another dieoff myth debunked. Not only do we have substitutes, but they are relatively cheap compared to the other substitutes like electric vehicles which currently carry a price premium.
Doom? Maybe, but if so, not yet and not because of peak oil.

For more on the natural gas glut see http://ghawarguzzler.blogspot.com/