Chris was a software engineer for 17 years, working for powerhouses like Microsoft. However, after 9/11, he had an epiphany about life as we know it.
You see, like Michael Schaefer, Chris believes the world is facing the greatest crisis of the 21st Century in Peak Oil and global warming.
And in light of Shell's Oil Co.' admission earlier this week that "Shell takes the position that the debate is over. [ . . . ] This country should be embracing the issue [of managing greenhouse gases]," I've asked Chris to make sense of it all.
This is the first in a series of articles Chris has to agree to write for Energy & Capital.
Take it away, Chris . . .
The Great Awakening (or, Slouching Toward Sustainability)
By Chris Nelder
Nov. 11, 2006
This is the way the world ends
Not with a bang but a whimper
-T.S. Eliot
Dear Reader:
Earlier this week the Cambridge Research Energy Association (CERA) and its high priest Daniel Yergin put out a press release taking Peak Oil theory and its believers to task.
In a nutshell, CERA believes that technology will save the day . . . that it will find oil where it can't be found today, and produce oil that can't be produced today. And all at a rate that we haven't seen for decades! Essentially, they see technology magically producing exactly as much oil as our economic projections require.
This exemplifies why trying to understand the global energy situation is so difficult. Not only is there a vast amount of industry propaganda and deliberate misinformation being foisted on the public, but there is also a dearth of reliable data about actual supplies. Or, for that matter, a common methodology for comparing resources and opinions.
We are beginning to learn about the major aspects of this tangled web-peak oil, climate change, resource overuse, environmental destruction, terrorism-but few people are able to view them all at once, as a coherent whole. And this is our tragic flaw.
For all our advances, for all our technology, all our history, our modern achievement of global, liquid, and trusted markets, and our ever-deepening knowledge about the world, we remain mostly ignorant of how all the parts fit together. We are specialists, not holists.
We're content to tinker with the controls, but don't bother us with all the "externalities," like the cost of extracting resources from the environment, the emissions from manufacturing, the environmental impact of using oil or the cost of disposing of it. Indeed, to even suggest that we should worry about these things smells of environmentalist dogma to your average capitalist.
But, as we shall see, we have now reached a "great moment" in human history, a crucial turning point where this whole great experiment in industrial civilization seems poised either to explode into new heights of technological progress, burgeoning population, and an unprecedented level of global prosperity-or keel over from its own sheer bulk.
Who are the harbingers of this change?
This week, in its biannual Living Planet Report, the World Wildlife Fund said the natural world was being degraded "at a rate unprecedented in human history," that since 1970 the population of some 1,313 separate species of fish, amphibians, reptiles, birds and mammals from around the world has declined by 30%. Humanity's "ecological footprint," our demand for food, timber, shelter, and ecosystem services (such as absorbing pollution) exceeded the earth's biocapacity by 25% in 2003, they said, and if demand continues at the current rate, two more planets would be needed to meet global demand by 2050.
Hype or reality?
Also this week, a new study published in the journal Science said that given current trends, 100%-that's right, all-of the ocean's species will collapse by 2048. The study found that ocean fish, seafood and plant species that have already "collapsed" reached 29 percent in 2003, up from about 13 percent in 1980.
Hype or reality?
Severn Suzuki, daughter of famed environmentalist and author Dr. David Suzuki, launched this scathing indictment of modern society at the 1992 U.N. Earth Summit:
In my life, I have dreamt of seeing the great herds of wild animals, jungles and rainforests full of birds and butterflies, but now I wonder if they will even exist for my children to see.
Did you have to worry about these little things when you were my age?
All this is happening before our eyes and yet we act as if we have all the time we want and all the solutions. I'm only a child and I don't have all the solutions, but I want you to realize, neither do you!
You don't know how to fix the holes in our ozone layer.
You don't know how to bring salmon back up a dead stream.
You don't know how to bring back an animal now extinct.
And you can't bring back forests that once grew where there is now desert.
If you don't know how to fix it, please stop breaking it!
She was 12 years old at the time.
At a luncheon in Portland last month, John Hofmeister, president of Shell Oil Co., made this unequivocal statement: "The ease with which we all lived in the last 50 years, with cheap energy, is coming to a close. The next 50 years cannot be like the last 50 years. The oil demand-and-supply equation now constantly flirts with crisis. Americans need to develop a sense of privilege rather than entitlement when it comes to energy use."
Matthew Simmons, the world's top investment banker in the oil industry and a top energy advisor to President Bush, recently said this: "There is just no way-with the limitation we have of oil rigs compared to projects-to keep supply growing: that's an impossibility." Further, he called for an "end to globalization."
Think about that for a minute. The top oil investment banker in the world, a man who is deeply committed to business and to global oil commerce, has called for an end to globalization. Even while the rest of the world's business and political leaders are pouring their energies into promoting it.
Last year, Chevron spent an estimated $40 million on an ad campaign proclaiming that "the era of easy oil is over." It acknowledged that while it took 125 years to burn through the first trillion barrels of oil, we'll burn through the next trillion in 30-a surprisingly candid statement.
In 2004, a leaked Pentagon report predicted that rapid climate change may well set off global competition for food and water supplies and, in the worst scenarios, spark nuclear war. We need not revisit here all the numbers and models for climate change. We all know what a very serious threat it is. But consider this: It is estimated that if we were to cease all greenhouse gas emissions today, completely, worldwide, the emissions that are already in the atmosphere would continue to change the global weather patterns for some 100 years or more.
Yet we do not even have an elementary framework for understanding and predicting global weather patterns, as meteorology is still very much an infant science. We have already had an impact on the planet that we have no way of understanding, let alone controlling.
And again this week, in a rare concession to reality, the International Energy Agency (IEA) has admitted that the world will need to spend an extra $3 trillion on energy by 2030, and even then there is "no guarantee" the effort would succeed in meeting demand. (If that cost were distributed proportionately to consumption, the U.S., being the consumer of 25% of the world's energy, would have to spend $200 billion a year for the next 25 years). "The energy future we are facing today is dirty, insecure and expensive," they warned, and called Big Oil's increased capex "to a large extent illusory" because it's "blunted" by rising costs for labor and equipment.
They also projected that the world's demand for oil will increase by 1.7% next year. Meanwhile, the drain on OPEC will increase in Q4 of this year by 1.6 million barrels a day over Q3, because non-OPEC producers aren't keeping up. These statements are in stark contrast to the relatively sunny projections to which we have become accustomed from the IEA.
The world's foremost authority on peak oil*, the Association for the Study of Peak Oil, has modeled all the known and anticipated oil fields in the world and determined that the peak in global production will likely occur around 2010-2012, at which point it will begin a terminal, remorseless decline, tailing off to negligible amounts about 50 years later. We do not know how the supply gap can be filled.
In public statements, Saudi Arabia assures the world that they can increase their production to 13.5 million b/d by 2012, but their actual output appears to be dropping, and the "water cut" from their fields is approaching the point where it will no longer be economical to harvest the oil. The Saudis, along with the rest of OPEC, are where the world must turn for more oil, again because the non-OPEC producers are either past their peaks or unable to bring any significant new supply to market-mostly for intractable geopolitical reasons.
U.S. Rep. Roscoe Bartlett, in his 2005 Energy Conference, puts the problem in good perspective: "Eighty-five percent of the energy we use comes from fossil fuels. That will wind down and by and by, we're going to have to live on that 15 percent and hopefully we can grow it above the 15 percent that it is now. But that is the dimensions of the challenge that we face. "
An incisive paper published last month by the Energy and Resources Group at U.C. Berkeley titled "Risks of the oil transition" demonstrates that the economic, security, and environmental problems that come with oil depletion must be solved in concert.
If they are not, then the loser will be the environment, for the simple reason that immediate economic and security concerns will trump long-term concerns about climate change, resulting in a vast increase in greenhouse gas emissions. "Because of the large environmental and security externalities involved, markets alone will not respond to this problem, so government policies to manage all three risks of the oil transition are needed now."
Or, perhaps more accurately, because of our inability to recognize the externalities involved, human self-interest cannot be trusted to solve these interrelated issues.
Sincerely,
Chris Nelder
* “Proponents of peak oil argue that the world has already tapped most of the easy-to-find deposits and that the drop in supplies combined with ever-growing demand point toward inevitably higher prices that will eventually hamper global economic growth.”
http://www.fcnp.com/index.php?option=com_content&task=view&id=482&Itemid=33
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