This isn't your ordinary, bland-slide-decks-with-boring-exhibits conference. It's the cutting edge of the oil and gas business, or perhaps more accurately, the cutting edge of all industry: offshore, particularly deepwater (over 1000 feet of water) drilling. Giant machines, sprawling constructions of pipe and pumps and electronics and incredibly high-tolerance parts litter the sprawling exhibit hall. The speakers are top executives in the oil and gas industry, and policy leaders on energy and climate change. Some 60,000 people from all over the globe will attend this year's conference. In short: It's immense.
I could describe the utterly amazing technology on display here. I could share what I learned about the oil and gas industry's deep commitment to safety and minimizing its environmental impact. I could inundate you with data and names and affiliations.
But that's not what the discussion at this conference is about—not from my perspective.
The top issues of the energy industry revolve around policy more than technology. Should we drill ANWR and the Outer Continental Shelf (OCS)? Can we achieve energy independence? How can we grapple with climate change without destroying the economy, and the sources of energy on which we utterly depend? Can renewables supplant fossil fuels?
As critical as these policy debates are, I see little in the way of progress.
An Ironic Debate
I saw a parade of oil industry representatives plead for a transparent and fact-based public dialogue about our energy options for the future. We should step away from the all-or-nothing debate on fossil fuels vs. renewables, they said, stop demonizing any of our potential energy sources, and get serious about addressing our energy problem before it's too late. As the head of the API said, "The energy issue will intensify until cooler heads prevail," and the debate desperately needs to be depoliticized.
But in the next breath, apparently unaware of the obvious contradiction in it, I saw those same executives complain bitterly about the policymakers who stand in the way of their progress. I heard them discount the potential of wind and solar to meet our energy needs, while trumpeting the much smaller footprint of modern oil and gas production. I heard overblown claims about how technology will continually increase reserves, and how offshore drilling in America could solve our problems if only they were allowed to do it.
One executive decried the "cheap shots" taken at the oil and gas industry by climate change activists, and then a few moments later mentioned how much he liked a print ad that offered a false choice between offshore drilling and high gasoline prices.
I asked a panel of oil company executives how a potential 2 - 3 million barrels per day (mbpd) of new oil production from the OCS by 2030 (according API and EIA data) would figure against the background of steadily declining North American supply. The only response I received was that 2 mbpd is a lot, we'd be happy to have it, and if we don't start drilling for it now, we'll regret it.
I heard not one word suggesting that oil production may have in fact peaked, no mention of decline rates, nor any hint that there might be any limits on supply other than the political will to develop new sources.
The oil and gas industry does acknowledge that the burning of their products probably contributes to climate change. They are resigned to the fact that carbon will soon come with a price, and they are intent on helping to define how that will be done under the rubic that "If you're not at the table, you're going to be on the menu." At the same time, they seem to have a greater appetite for a political approach to the climate change debate than an objective evaluation of the data.
The green side of the debate is, unfortunately, no better. An attendee stood before a panel of major oil company executives and ask how the energy industry could engage more fruitfully with policymakers and the public on climate change, then admitted that she had boycotted a recent local presentation by T. Boone Pickens about his energy plan for the country simply because he was an oil baron. She considered it an act of conscientious objection.
The contradiction of her position apparently escaped her as well, along with the fact that of all the oil barons in America's history, Boone is arguably the most forward-thinking and realistic, and a major proponent of moving beyond oil. Her story offered a classic demonstration of how too-principled positions on energy so quickly lead to stalemates.
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As a longtime advocate for renewable energy and a former solar system designer, I have been to my share of "green" conferences. I have often heard the utterly unrealistic claims of renewable energy advocates, and listened to them vilify the oil industry. They seem to have as little appetite for the facts on fossil fuels as the fossil fuel industry has for objective evaluation of renewables.
So while I agree with the conference speakers who called for a balanced, non-demonizing policy debate, what I see is both sides—the green/climate change side and the fossil fuel side—retreating to their corners, throwing up walls of propaganda, and demonizing the other side.
The middle ground, where truth and progress reside, feels virtually empty.
I am left to ponder, once again, why that is. And once again I come to the conclusion that you can't make policy without politics. What we have here is simply political maneuvering with each side trying to gain an edge by overstating their positions, in hopes that when the dust settles, they'll be left holding something. It is most emphatically not a neutral and balanced dialogue.
In fact, there is no dialogue at all. Cleantech people go to cleantech conferences, and oil and gas industry people go to oil and gas conferences, and rarely do the two crowds mix. In the halls of Congress there is much shouting, but little listening. At the end of the day, it is the art of political compromise, not data, which drives policymaking.
The oil and gas industry remains mired in denial about the peak and decline of its products. Renewable advocates are still lost in a dream about quickly replacing fossil fuels with green energy and an infrastructure that runs on it. Climate change concernists continue to pin their hopes on visions that cannot possibly be realized in the time frames they need. No side trusts the other.
Ten Inconvenient Truths
Allow me then to stake out a bit of middle ground, based on what I believe to be the objective facts, in an effort to bring the parties together and perhaps make some actual progress on the policy front.
We have extracted nearly all of the world's easy, cheap oil and gas, and now we're getting down to the difficult, expensive stuff. The largest untapped resources that remain are in extreme places like deepwater and the Arctic, and marginal formations like shale. As a result, global oil production has for all intents and purposes peaked. Natural gas production will also peak in 10 to 15 years. Neither technology nor high prices will change that. Therefore we must begin to replace those fuels with renewables, and use what remains much more efficiently, with the expectation that most of the world's oil and gas will be gone by the end of this century.
Drilling for oil and gas drilling in the OCS and ANWR must and will be done; our need for those fuels is simply too great to pass them up. An additional 2-3 mbpd will put a dent in the roughly 12 mbpd we now import, but if we drill for it now, it won't come to market for 10 years or more. By that time, it probably won't even compensate for the depletion of conventional oil in North America, nor will it do much to reduce prices. But it will be crucially necessary, and producing it won't make an ugly mess of the environment.
Renewables are clearly the long-term answer, as is an all-electric infrastructure that runs on its clean power. However, it will likely take over 30 years for renewables to ramp up from a less than 2% share of primary energy today to 20% or more. They probably won't even be able to fill the gap created by the decline of fossil fuels. Oil and gas currently provide about 58% of the world's primary energy, and they will remain our primary fuels for a long time to come.
It will take many decades to reconfigure out transportation systems to run on electricity. It will take decades to fix our wasteful, leaky built environment so that it doesn't need as much energy to begin with. None of the solutions will come quickly or easily.
Neither renewables nor fossil fuels nor nuclear power alone can bring "energy independence." Indeed, if independence means isolating ourselves from the rest of the world's energy commerce, it might not even be desirable.
We must pursue all sources of energy immediately and aggressively if we hope to meet our future needs, and pitting one against another is counterproductive.
Nuclear power will not grow significantly in the next several decades, as nearly all of the existing reactors will need to be decommissioned within the next 20 years, and a new generation of reactors must be built to replace them. After we do that, a renaissance for next-generation nuclear energy may be a possibility but it will only happen after we have confronted the crises of peak oil and peak gas. It may produce no net reduction in emissions at all.
It is quite possible that even our best efforts on all fronts will not achieve the carbon emission targets we have set. Climate change must be confronted via a unified policy on emissions and energy supply, which is to say that in our zeal to control emissions, we take care not to squelch the production of the oil and gas that constitutes the majority of our energy supply, at least until we have something to replace it. To do so could have unintended and paradoxical consequences, like impeding the manufacture of renewable energy devices, and contributing to tight supply situations that once again cause fossil fuel prices to skyrocket and further damage the economy. Rather than emphasizing the uncertainty on climate change data, and fomenting fear about the cost of mitigation, all sides must come together in a depoliticized dialogue strictly based on neutral scientific analysis.
We should use accurate and unbiased models of the future growth and decline curves of all forms of energy for policymaking—models based on historical data, not faith. If the data says we're likely to recover another 1.2 trillion barrels of oil worldwide and no more, then we should not assume that future drilling and technological progress will somehow turn that into 3 trillion barrels of recoverable oil.
Carbon emissions will soon come with a price. Drilling the remaining prospects for oil and gas will be expensive: From the decision to invest until first oil is produced, it can take 10 years and $100 million dollars to drill the first well in a new deepwater resource, using rigs that cost $1 million a day to run, and the production platform can cost as much as $5 billion. Deploying thousands of wind turbines and square miles of solar will be expensive, slow, and difficult. Replacing millions of inefficient internal combustion engine vehicles with electric and plug-in hybrids will be expensive. Rebuilding the nation's rail system will be hugely expensive. In short, the good ol' days of cheap electricity and gasoline are likely gone forever, and all the solutions going forward will be expensive.
I share the industry's concern about energy illiteracy, but it cuts both ways. It's true that as long as oil and gas provide the majority of our energy supply, we must continue to invest and drill for it, and the industry must work hard to educate the public and policymakers about that. But to claim that limits on drilling are the only problem, or that renewables cannot provide the energy we need in time, exploits that illiteracy and deliberately confuses the debate.
The fact is that there are good people and good intentions on all sides of the issues, and none of them wants to destroy the environment or the economy.
As I see it, neither the fossil fuel industry nor renewable boosters are yet willing to come out of their corners and work with each other in an honest fashion to develop a truly viable path forward on energy. Until both sides put aside their exaggerated claims and partisan bickering, the public will remain confused about the true options and continue to use politics, not neutral data, as their guide. That cannot produce good policy, and it does all of us a grave disservice.
Such unhelpful contentiousness, denial, and cheating on the numbers is a luxury we can no longer afford. Our energy and climate change problems are real, they're urgent, and they're getting more so every day. It's time to set the tactics of the last war aside, wring politics out of the dialogue, and start grappling in an honest and direct way with real solutions. Nothing else will do.
Next week, I'll dive back into energy data, and share some observations about the impressive technology and the potential of offshore drilling.
Until next time,
Chris
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From the O&G perspective it is all politics. Natural gas is not as carbon clean as Hydrogen, but for the caloric value it is better than ethanol with less carbon. We have lots of it, right here in the US of A, and the price today is dirt cheap. That is why they are not drilling as much for it. Oil is still plentiful in deep water. You saw the equipment at OTC. There are 4 oil giants in the Gulf Coast canyons. Even at $147/bbl they did not try to bring it ashore. Texaco had half a pipeline built when Chevron bought them.
But ... I should write a book.
It appears almost inconceivable that educated people about these subjects are in denial about the truth.
Why is it so difficult to admit, that the O&G industry has had its day in the sun and that time is really of the essence to try and come up with alternatives? The demand of energy raises around the world, but the supply is limited.
Why can our "learned" experts not see that soon we run out of options?
There will be significant nuclear power addition. Those nuclear plants will mainly be in China, India, Russia, South Korea and other countries. 75% outside of the OECD.
China in particular is ramping up to build a lot of Westinghouse AP1000 reactors and the new pebble bed high temperature reactor. Pebbles are achieve 16% burnup now and can achieve 60-70% burnup. There are other advanced fission and fusion options that should be pursued [the actual first deployment is likely to be outside the USA and probably in China and eastern europe].
There are enhanced oil recovery methods that can make significant impact. Petrobank's THAI/Capri.
Electro Thermal Dynamic Stripping Oil Recovery (ET Energy)
Biofuels can also contribute significantly. Jatropha, large scale seaweed (Japan and asia), miscanthus, algae, waste to biofuel
I have a lot more at my nextbigfuture site.
Great article. Very thoughtful and balanced. The renewables crowd need a lesson in thermodynamics. The oil/gas crowd need top be more honest about Peak Oil.
Gary
I wish you could find the money to get it published in all major newspapers in the country. You are absolutely correct that the oil industry has its head in the mudpits when it comes to peak oil.
I am and exploration geopyhsicist/geologist that spent 32 years with Gulf and Chevron before retiring in 1999. I have studied crude oil/liquids supply since 2004. We are in serious trouble and most of the citizens are clueless for the lack of a better word.
I believe oil will reach $500 per barrel or the economy will crash (again) which ever comes first.
You write some interesting articles.
Jim Medlin
Spring, TX
The deafening silence you hear from this article is the complete absence of even an offhanded mention of the word "COAL" as a primary energy source for the world over the next 100 years. And the inability of the West to influence the emerging economies the construction of clean burning power plants.
How can we have an "honest dialog" without including COAL?
Seeing Exxon mobil advertise solar power or any other company promoting green or alternative energy developement just sends a red flag up... as to their true intentions.
In fact, the eath has millions of years of cooling and warming and civilization only began with the LAST warming!
And by the way, the world has been inconveniently cooling for the last NINE years.
Global warming is only a political ploy to secure more control over the means of production.
However, nuclear can provide real and fairly quick results if the plants are put on military bases using one or two type designs only, but your point about the immense changes required to substitute electricity for oil is salient.
When you say both sides are "retreating to their corners, throwing up walls of propaganda, and demonizing the other side.
The middle ground, where truth and progress reside, feels virtually empty.", you need to recognise that the same attitudes prevail in climate science. There has never been any evidence that atmospheric CO2 has caused any significant global warming, and attempts to engage on scientific issues always fail in a barrage of personal abuse.
Please just look at this one graph:
http://climatesci.org/wp-content/uploads/dipuccio-2.jpg
For anyone who understands the overriding importance of oceans in the global heat budget, it is absolute proof that there is no dangerous man-made global warming ("AGW").
The full explanation is here:
http://wattsupwiththat.com/2009/05/06/the-global-warming-hypothesis-and-ocean-heat/
This is by no means the only evidence. The failure of the tropical troposphere (the central engine of AGW) to behave as predicted by the IPCC computer models is just as important, if not more so, as are a number of other factors such as the actual behaviour of clouds.
If we can only get the politicians to recognise that the global warming scare is extraordinarily bad science, we gain more options and more time for dealing with peak oil and the transition to alternative energy sources.
By the way, did you know that the amount of solar energy reaching the Earth's surface every day is equivalent to around 200,000,000 nuclear power stations? (500mw each). [I have seen 400m quoted, but my own calcs suggest 200m is closer]. It is certainly conceivable that solar energy could supply all our energy needs in time.
Today should have been the big day and after hours it went down 10%.
I would not like to be in your positon now.
With all my sympathy for your efforts though. Insiders selling as "if there is no tomorrow" for the company.
Exagerating a bit , I know.
Good Luck,
Hugo Persijn
But we also know that the dealmakers are heavily vested - either financially (oil and gas) or ideologically (the Greens). For these guys, it's not just policy in the balance, its their fundamental identities. And it's not clear that either camp has any clear sense of the truth.
In other words, these are terrible people to have leading the debate. And yet, they're what we get, for lack of better information. And here, data can make a huge difference.
Personally, I don't want to hear that "Nuclear / Coal / Wind / Whatever is off the table." I want to see them ALL on the table, stacked up against a common set of measures that provide for clear-eyed assessment.
If something is bad, I want to know how bad, and why, and above all, I want to see for myself. I don't want some conspicuously un-objective partisan telling me what I can or cannot even consider.
Which leads to a larger question, which is why are the partisans SO partisan? It's not that there's simply a lack of rational thought, it's as though reason is actively punished in the same shrill and often vulgar way that religious fundamentalists use with the "unrighteous".
Turns out that bad faith may have plenty to do with it.
In the forward to her book "The Nature of Economies" Jane Jacobs states that "The basic premise on which this book is constructed is that human beings exist wholly within nature as part of the natural order in every respect. To accept this unity seems to be difficult for those ecologists who assume - as many do, in understandable anger and despair - that the human species is an interloper in the natural order of things. Neither is this unity easily accepted by economists, industrialists, politicians, and others who assume - as many do, taking understandable pride in human achievement - that reason, knowledge, and determination make it possible to circumvent and outdo the natural order. Readers unwilling or unable to breach a barrier that they imagine separates humankind and its works from the rest of nature will be unable to hear what this book is saying."
And that's the real problem with the debate - the near total domination by the "unable and unwilling" who are not only totally deficient as self-aware human beings, but who also insist, that others adopt their blinkered views, and freely condemn anyone who dares suggest that the separation isn't real.
The truth is, you will NEVER get these people to be reasonable - not without first getting them to reexamine their most fundamental prejudices about themselves, and how they relate to their environment. And honestly, you'd have an easier time convincing medieval peasants that the world is round.
Which is why you don't bother. Instead, you gather data, and present a clear and complete picture of reality, undistorted by fanatics or freeloaders.
In other words, you directly engage sensible people in a sensible fashion, and ask everyone else to please check themselves at the door.
'If only we had the funding we could achieve 20% renewable energy usage in 30 years time?' When the agent of "change we can believe in" we just elected to the Presidency has poured enough of our money into the open mouths of the Banksters who own him in the last 100 days to accomplish that goal in 8 years?
When the geothermal resources in the country alone can supply our entire energy requirements? When current technology wind and solar thermal linked by a national HVDC grid can supply 70% of our baseline energy needs at a cost less than next-generation coal or nuclear plants? When the factories of dead and dying auto manufactures stand empty ready to build wind and solar thermal on a massive scale?
Our energy future will be determined by who holds political power and sets priorities-- not by a lack of technical solutions.
So let's talk about the real world. Within that thirty year period in which you expect only 20% of our energy to come from renewables, the probability that the Arctic ocean will be ice free every summer is so high that it should be the basis of every plan. In view of the accelerated rate of loss of thick multi-year ice, the 5-6 degree median warming observed in the high Arctic, the feedback mechanisms from methane release from permafrost, and the loss of reflectivity from snow cover, any other projection is based upon hope or ignorance rather than science. If the Arctic ocean looses its ice cover the Greenland icecap cannot survive, and the world's climate will be drastically changed beyond anything experienced in human history.
Still think that we will be getting 80% of our energy budget from burning carbon fuels in 2040? Whether you are a Kunstlerian survivalist or worship at the altar of technology, one thing is nearly certain-- we will not live in a world that is a linear projection of the one we live in today.
oil energy, solar and wind power is three times more expensive than nuclear, requiring millions of acres of earth surface. They need extensive electric wiring connections and expensive energy storage systems when the sun does not shine or the wind does not blow. They also ruin the ecology of massive land or sea areas, and suffer from enormous maintenance costs to repair damage from sand or wind-storms, bird droppings, and dead birds. Only uranium, thorium, and coal can economically provide the world with all its energy needs for more than 2000 years. But coal pollutes the biosphere and should be preserved as raw material to make plastics and organics when oil is gone. In the USA we must increase our present stable of 104 non-polluting green reactors to 700 reactors by 2050. Because it takes ten years to get the first delivered kW after planning, designing, licensing, and construction of a new nuclear plant, we must start asap and proceed as we did in WW-II when we made thousands of aircraft a month. Unfortunately too many politicians and public figures have been brain-washed into believing that nuclear power is dangerous. In the 1980s these mal-informed people drove the once world-leading US nuclear power industry out of the country to the point that now France, Russia, Japan, S.Korea, China, India, and others are taking over nuclear power generation which the Creator provided to mankind just in time to overcome the pending out-of-oil energy crisis. However most likely the USA will first experience great impoverization and economic collapse (one goal of Al Qaida) before it realizes the follies of previous governments, and re-activates the visionary nuclear power development program started under president Eisenhower. With muli-gigawatts of nuclear power we can provide electricity for vast fleets of future electric plug-in vehicles, and produce hydrogen and hydrogen-derived portable fuels by electolysis of water for long-haul transport (aircraft, ships, etc), as well as provide energy for heavy industry (manufacture of cars, airplanes, bulldozers, bridges, etc). The so- called "nuclear waste problem" is an enormously hyped-up propaganda lament fabricated and spread by anti-nuclears. Fission waste from a typical 1000 MW plant amounts to one garbage-can-full (one aspirin tablet per person) per year whose handling and disposal has been no problem for nuclear engineers. The US nuclear navy has been handling the transport and disposition of such quantities safely for half a century. Please read "The Nuclear Imperative" published by Springer(ISBN 1-4020-4930-7). I believe in a democratic society but when uneducated misinformed groups such as Greenpeace, the Sierra Club, Mothers of the Earth, etc. are trying to dictate energy policy in State legislatures, God help us. Such "Terror of Democracy", if not counteracted, will assuredly drive us all into an energy deprivation abyss.
Except for this little fantasy the article is excellent. Sorry, but the greed factor of energy producers, politics, religion and nationalism overide everything else. We have libraries full of historical data on this subject.
The human race with its inherent survival/greed component can never change. It's difficult to believe this planetary disaster could have unfolded in any other way.
Is there any chance the problem is the world is over populated? Is there any chance this will change? Is there any chance if this is the problem it could be solved in a voluntary manner? Is there any chance consumers are depleting mineral commodities? Is there any chance this is not a mathematical certainty?
I'm probably out of line here, my comment was likely supposed to be about how we are going to get make money out of this chaos.
We need a "Manhattan Project" approach to solve our energy problem.
It is about time for all stakeholders to join in and participate.
Same as in national defense or the mission to the moon, we need visionary leadership to secure our energy future and protect the planet at the same time.
It is time to end the polarized approach of the left and the right and join with all we have to find true solutions based on facts, technology and pragmatism.
I have lived through the energy crises of the seventies. We never mastered a consistent and fruitful energy policy.
This is the last call. Hopefully, we are wiser now. Conserve, develop, sustain. It is five minutes to midnight and Cinderella time is almost over.
Blind faith in renewables is a hopeless deadend. I think you will see that the numbers nullify your hoped for future results.
Even if Congress locks up those sources, Bakken by itself could replace OPEC oil.
The key is to look at "provable" or "probable" reserves and the true extent of our vast supply will reveal itself.
PEAK oil theory fails again.