Peak Oil
and
Climate Change
AGU-Joint Assembly
Toronto
26 May 2009
1999 - ~$10/b
James W. Murray
School of Oceanography
University of Washington
2008 - ~$147/b
IEA World Energy Outlook - Nov 2008
“The world’s energy system is at a crossroads. Current global trends in
energy supply and consumption are patently unsustainable.”
Conclusion
We know enough to see that Resource limitation
Needs to be an IPCC scenario
with special acknowledgement to David Rutledge (Cal Tech)
Outline
• The 4th UN IPCC Assessment Report
SRES Scenarios
• Oil Reserves
• Hubbert’s peak
– The history of US oil production
– How much oil and gas will the world produce?
• The Coal Question
• Discussion
– Future carbon-dioxide levels
– Conclusions
Oil Production in the IPCC Scenarios
Annual Oil Production, Gb
80
40
28
0
2000
•
•
•
•
2050
2100
A1 AIM
A1 ASF
A1 Image
A1 Message
A1 Minicam
A1 Maria
A1C AIM
A1C Message
A1C Minicam
A1G AIM
A1G Message
A1G Minicam
A1V1 Minicam
A1V2 Minicam
A1T AIM
A1T Message
A1T Maria
A2 ASF
A2 AIM
A2G Image
A2 Message
A2 Minicam
A2-A1 Minicam
B1 Image
B1 AIM
B1 ASF
B1 Message
B1 Maria
B1 Minicam
B1T Message
B1High Message
B1High Minicam
B2 Message
B2 AIM
B2 ASF
B2 Image
B2 Maria
B2 Minicam
B2High Minicam
B2C Maria
Gb = billions of barrels 1 barrel = 42 gallons = 159 liters
In 13 scenarios, oil production is still rising in 2100
In none of the scenarios did oil production decrease because of
resource limitation. None consider Peak Oil!
Oil production is never going to be more than today.
3
What is Peak Oil?
It’s not about Reserves!
It’s all about the Production Rate!
We are not close to running out of oil
Proved Reserves, Gb
OPEC Oil “Proven” Reserves!
Iran
Iraq
Kuwait
100
0
1980
•
•
•
•
Saudi
200
UAE
Not proven
by anybody!
1990
2000
430Gb rise in reserves, no adjustment for 193Gb produced since 1980
These questionable reserves are 45% of world oil reserves used by IPCC!
A recent leak of Kuwait Petroleum Company documents showed the
actual reserves are only 48Gb (official reserves are 102Gb)
1980 Kuwait reserves adjusted for production since then are 55Gb
From BP Statistical Review
Gb = billions of barrels
M. King Hubbert
• Geophysicist at the
Shell lab in Houston
• In 1956, he
presented a paper
with predictions for
the peak year of US
oil production
A model
logistic
distribution
Oil Wells Peak - Oil Fields Peak - Regions Peak - The World will peak
Everyone agrees that world oil will peak – controversy on the date
Typo:
Million!
US Oil Consumption today is about 20 million barrels of oil/day
ANWAR will not save us!
Hubbert’s Peak
•
•
•
•
From his 1956 paper
Hubbert drew bell-shaped curves by hand, and added up barrels by
counting squares
For the larger estimate, he predicted a peak in 1970
Hubbert has been much criticized  there is no consideration of
supply and demand curves, prices, or policy, and new technologies
US Crude-Oil Production
• Production is bell-shaped, like the curves Hubbert drew
• Average price after the peak was 2.6 times higher than before
10
The Logistic Curve or Rate Plot
P/Q = mQ + a
Q for which P/Q = 0 is 198 gigabarrels of oil.
Also called Qt (maximum cumulative production)
Half of this is 99 which occurred in 1973
Lower 48
A model for exponential growth in a finite system
Another Approach: Cumulative Oil Production
225Gb ultimate
Cumulative Production, Gb.
200
90% exhausted in 2011
Includes
48 + Alaska
100
31Gb remaining
USGS/MMS assessment 189Gb
0
1900
•
•
1950
2000
2050
EIA data from 1859
Fit for cumulative normal gives the ultimate production and the time for 90%
exhaustion
Historical Projections for US Oil
McKelvey
Hubbert
The power of Hubbert Linearization is that it uses past
behavior of a system to indicate possible future performance rather
than relying on the overoptimistic opinions of resource “experts”
13
Maximum Cumulative Production (Qt)
Will Be 2165 Gigabarrels
½ Qt = 1083 Gb
Historical Fits for World Oil and Gas
Ultimate Cumulative
Ultimate Cumulative Production of Oil + Gas = 605 Gtoe
Maximum cumulative through 2100 for an IPCC scenario
16
is 2,600 Gtoe
Who are the experts that IPCC turn to?
Energy Information Agency (EIA) - DOE
International Energy Agency (IEA) – Paris
US Geologocal Survet (USGS) - Washington
Their models for future emissions are driven by demand (not supply).
EIA, IEA and IPCC assume that supply will meet demand
USGS assumes much oil yet to be found
The EIA forecasts in 2008 projects a 30% increase in oil production between now
and 2030 (from 85 to 97 mb/d) (D = +12 mbd).
The hard truth is that increasing energy supply at all will be difficult.
To have growth we need to balance
decline of exisiting fields
with discovery of new oil
Existing Oil Fields are in Decline
Existing oil fields are declining at - 6.7% per year (IEA 2008)
For 2005 to 2030 the world needs 45 mbd of new production –
just to maintain flat production
The projected growth requires
discovery of 45 + 12 = 57 mbd of new oil!
57 ÷ 9 = ~6+ new Saudi Arabias
Urban Legend – we can drill more to get more oil
Oil discoveries have been declining since 1964
The red box shows the average amount estimated to be discovered by the USGS
each year between 1995 and 2025.
The world’s oil provinces have been well explored.
Future discoveries will be limited to smaller structures and deeper formations
What about coal?
There are supposed to be hundreds
of years of supply of coal!
Big 3 Reserves:
US (27%)
Remarkably the data-quality is very poor globally
Russia (17%)
but especially for China and SE Asia and FSU
China (13%)
then
India, Australia, South Africa
We also have a big problem with coal.
The Reserves may not be as large as
We’ve been led to believe.
"Present estimates of coal reserves are based upon methods
that have not been reviewed or revised since their inception
in 1974, and much of the input data were compiled in the
early 1970s.
Only a small fraction of previously estimated reserves are
actually minable reserves."
from the National Academy of Sciences
Report on Coal, June, 2007
UK Coal Production
• Mt = millions of metric tons
• The average price after the peak is 2.4 times
higher than before
• Britain now imports 74% of the coal it burns
22
Rate Plot for British Coal
23
Projections vs Reserves for World Coal
Region
Projection Gt
Reserves Gt
Eastern US
37
96
Western US w/o Montana
33
79
Montana
68
Central and South America
16
China
88
South Asia
189
68
Australia and New Zealand
50
77
Former Soviet Union
36
226
Europe
21
44
Africa
16
30
435 (1.6Tboe)
903
World (at 3.6boe/t)
• UN IPCC scenarios assume 18Tboe is available
for production
from D. Rutledge
Where Does the IPCC Get Its Coal Numbers?
World Energy Proved recoverable Additional recoverable
Council survey
reserves, Gt
reserves, Gt
1992
1,039
702
1995
1,032
680
1998
984
3,368
2001
984
409
2004
909
449
2007
847
180
• The scenario report SRES (2000) references the 1995 and 1998 WEC surveys
• Downward trend in proved recoverable reserves
• The IPCC chose to use additional recoverable reserves and they also chose
1998 (3,368Gt) instead of 1995 (680Gt) — additional recoverable reserves
are now 19 times smaller than in 1998
25
Many independent groups are coming
to the same conclusion
Uppsala – Kjell Aleklett Peak Coal in 2030
(examples follow)
http://www.tsl.uu.se/uhdsg/Publications/Coalarticle.pdf
Energy Watch Group (EWG-Germany) Peak Coal in 2025
http://www.energywatchgroup.org/files/Coalreport.pdf
Institute of Energy (IFE)
Kavakov and Peteves (2007) The Future of Coal
http://ie.jrc.ec.europa.eu/
Richard Heinberg Post Carbon Institute (book in progress)
http://www.richardheinberg.com/museletter/195
Historical fits for Oil, Gas, and Coal
Ultimate Production
Reserves
BP for oil and gas
WEC for coal
Fits for
ultimate
Projection
Half-Way 2019
Cumulative oil, gas,
and coal
Projection
Cumulative coal
Ultimate Production of oil + gas + coal = 938 Gtoe 27
Cumulative Future Fossil-Fuel.
CO2 Emissions, GtC .
Comparing with the IPCC Scenarios
2,000
1,000
Projection
0
2000
2050
2100
• This projection has lower emissions than any of the 40 IPCC scenarios
• This is still true even with full coal reserves
Carbon-Dioxide Levels
•
•
•
•
460ppm
460
440ppm
440
420
400
Projection
380
5
360
50% Stretch-out for
Fossil Fuel Burning
340
320
300
0
2000
2100
2200
2300
CO2 Concentration, ppm.
Fossil-Fuel CO2 Emissions, GtC.
10
280
2400
Simulations with the program MAGICC from Tom Wigley at the National
Center for Atmospheric Research (NCAR) in Boulder
This program was used in the earlier UN IPCC Assessment Reports
The program modified to use Rutledge projection for fossil-fuel emissions
profiles are business-as-usual for other greenhouse gases
Conclusions:
1) Supply Limitation will be serious
Existing scenarios and energy policies are based on emissions - not supply
We know enough to see that Resource Limitation needs to be an IPCC Scenario
Peak Oil has occurred or will occur soon. Coal Reserves are significantly less
than assumed by the IPCC.
2) Coal is thought of as a solution to energy needs –
This will be a disaster for climate change without CO2 sequestration.
Is CO2 sequestration realistic?
3) Energy will pass climate change as the hot button issue
We have to get our energy plan in order before we can move forward
on climate change
4) Energy Supply will Buffer Economic recovery
Recessions correlate with price rise results in energy > 5.7% of GDP
See Jeff Rubin (2009) (formerly CIBC)
5) Security Issue:
Seven nations control 75% of world’s oil exports.
There will be shifts in global power and wealth
Energy as a buffer on economic growth
James Hamilton (UCSD) – Recessions generally correlate with the price of oil.
If energy expenditures rise faster than income, then the share of income for other
things must decline
Oil Expenditures
as a % of GDP
Summary Table: IPCC SRES versus Rutledge
All values given in Gigabarrels of Oil Equivalents (Gtoe)
1990
Identified
Additional
Cumulative Resources Recoveries
Additional
w/Technology
IPCC
Oil+Gas
120 + 612 = 732 262 (low) 679 (high)
Coal
124 + 545 = 669
Rutledge
Oil+Gas+Coal
Oil + Gas
Coal
690
1905
Additional
Occurrences
>20,107 (with marine
CH4 hydrates)
3571
Ultimate Cumulative
= 938
= 605 (from 938 – 666)
Comparable to 732 from above
= 333
Comparable to 669 above
IPCC values in ZJ, converted to Gtoe using 42 GJ/toe and 0.5 toe/t for coal
ZJ = 1021 J
For oil: 7.33 barrels per metric ton
CO2 emission Scenarios
Annual Fossil-Fuel CO2 Emissions, GtC
40
30
20
10
0
2000
2050
2100
A1 AIM
A1 ASF
A1 Image
A1 Message
A1 Minicam
A1 Maria
A1C AIM
A1C Message
A1C Minicam
A1G AIM
A1G Message
A1G Minicam
A1V1 Minicam
A1V2 Minicam
A1T AIM
A1T Message
A1T Maria
A2 ASF
A2 AIM
A2G Image
A2 Message
A2 Minicam
A2-A1 Minicam
B1 Image
B1 AIM
B1 ASF
B1 Message
B1 Maria
B1 Minicam
B1T Message
B1High Message
B1High Minicam
B2 Message
B2 AIM
B2 ASF
B2 Image
B2 Maria
B2 Minicam
B2High Minicam
B2C Maria
From Oil + Gas + Coal
These Scenarios drive almost all climate change research
MAGICC Simulations
for CO2 and Temperature
• Written by Tom Wigley at the National Center for
Atmospheric Research (NCAR) in Colorado
• This program has been used in the IPCC assessments
• Simulation parameters
– IPCC “most likely value” temperature sensitivity:
3C/2CO2 concentration (“likely” range is 2.0 to 4.5)
– Aslam Khalil’s recent measurements for CH4 equilibrium
concentration: 1,750ppb
– Tom Wigley’s P50 values (IPCC scenario medians) for other
greenhouse gases: deforestation CO2 , N2O, NOx, VOCs,
SO2, C2F6, HFCs, SF6
– Our projection for CO2 emissions from oil, gas, and coal
burning.
36
Economists say – as price goes up, more oil will be produced
Elasticity has become virtually zero. It’s a market where supply rules.
from Kenneth Deffeyes
Coal Resources for the IPCC
Scenarios (Tboe), from Nakicenovic
Rutledge
projection
1.3
(at 3.6boe/t)
•
•
IPCC
Maximum
scenario
use to 2100
12
IPCC
Reserves
Identified
Recoverable with
technological
progress
2000
4.0
14
WEC
Proved
Recoverable
Reserves
Additional
Recoverable
Reserves
1998
4.0
13
2001
4.0
1.4
2004
3.7
1.5
2007
3.4
0.7
IPCC scenario coal resources are based on WEC survey categories
IPCC resources have not been adjusted for the new WEC surveys
38
Important Reading that will change your outlook
Matt Simmons (2005) Twilight in the Desert
James Kunstler (2005) The Long Emergency
Jeff Rubin (2009) Why the World is About to get a Whole Lot Smaller:
Oil and The End of Globalization
Important web-site
www.theoildrum.com
“We are all extraordinary skeptical of the "peak oil"
stuff. We know of no reliable information that suggests
that we're going to be running significantly short of any
fossil fuel in this century…It certainly won't happen with
any significant price on carbon.”
“We've done a few 300-year scenarios that have some
shortages in them, but even that may not be realistic.
This is especially so with coal!”
“The Chinese say they have enough coal for
centuries…The idea that we're only going to reach 450
ppm is not defensible, especially when we're already
around 385 ppm. Do we really think there is only another
60 years of fossil fuel left? I don't think so.”
PNNL Climate Modelers
…but, see my figures!
Mad Max Excluded
“The scenarios are intended to
exclude catastrophic futures that
involve large scale environmental or
economic collapses. In such scenarios
GHG emissions might be low because
of negative economic growth, but it
seems unlikely they would receive
much attention in the light of more
immediate problems. Hence, this
report does not analyze such futures.”
IPCC
Nested Assumptions
Energy scarcity is a myth
Fossil Fuels are superabundant
No reason to hoard or fight over them
Globally traded from haves to have-nots
Coal can be converted to anything
Fuel will remain cheap for a century
What controls the price of oil?
Supply versus Demand on International Market
Backwardation – during price increase
Contango – is not a place in Chile!
Tanker Storage
Possible Driver of a Future Price Crash
See: www.gasbuddy.com