More Peak Oil
Mr. Patrick Deneen, Associate Professor of Government at Georgetown, blogged this in reaction to my post on peak oil:
A person named Jim Manzi over at NRO’s The Corner is quite irritated by Peak Oil “hysteria,“…
…It amazes me that anyone with half a brain – and I’m not able to conclude on this evidence alone that has less or more than half, of course – could be so obtuse about the nature of the situation, once one has really given it any thought. Manzi, and others like him, doesn’t deny that we are facing a future of energy constraints – he simply says we don’t know when this will take place, so there’s nothing we can nor should do about it. However, implicitly he and others like him recognizes that it WILL happen, so the “don’t worry, drive happy” stance is tantamount to child neglect. It’s saying, let the future worry about our irresponsibility. It’s hard to think of a civilization that has been based on such an infantile premise.
“…It seems kind of beside the point whether Peak Oil is upon us now or twenty years in the future. There is a fundamental logic there that shouldn’t be shrugged off.” [Approvingly quoting a commenter responding to my post]
… As Manzi’s commentator points out, we will wait until energy is constrained to begin changing our behavior. However, if Europe is to be our future exemplary living arrangement (one that closely resembles the vision of “the urban transect” advanced by New Urbanists and some Catholic natural law thinkers such as Philip Bess), we should note 1. Europe has kept prices “artificially” high for years – since the gas shocks of the 1970s – through higher taxation, which it uses to fund an excellent public transportation system, among other things; and more importantly, 2., Europe never changed its basic living patterns as a result (along with smart zoning regulations that permit mixed use areas as well as limit building outside town and city limits).
Manzi suggests that we can wait until the last possible moment … However, if we KNOW it will be upon us at some point – and many reputable geologists believe it will be soon, soon, but regardless, it will come – then shouldn’t we use whatever energy bounty we have now to prepare for that eventuality? We will need to begin a rather significant project of infill of existing living arrangements, particularly the suburbs, to achieve the necessary population density to justify public transportation. We will need to build high speed trains between the more far-flung cities of the U.S., in anticipation of the demise of the airline industry (if Manzi doesn’t think they are done for, then he hasn’t been reading the papers.) We will need to encourage more local forms of economic activity, particularly agriculture. Not only will it be more expensive to drive, but even maintaining our current huge investments in the automobile infrastructure will prove increasingly untenable. For instance, the cost of paving our millions of miles of petroleum-based asphalt roads will prove unaffordable.
So here are some things that Professor Deneen knows:
1. That our forecast for when we will reach peak oil should have no impact on on what we should do.
2. That because we will at some future date achieve peak oil production, we should force changes now (through raising taxes on oil or other, I assume, more coercive means) to the consumption choices of the American population.
3. That Americans must have a spatial distribution for living and working that looks more like Western Europe, and that we need to begin “a rather significant project of infill of existing living arrangements, particularly the suburbs, to achieve the necessary population density to justify public transportation.”
4. That the US airline industry will die, and in anticipation of this, we “will need to build high speed trains between the more far-flung cities of the U.S.”.
5. That the U.S. agriculture industry needs to be restructured, and that people can no longer work so far from home, so we “will need to encourage more local forms of economic activity, particularly agriculture.”
6. That the U.S. highway system will be unaffordable.
I would love to be smart enough to know all of those things.
I suppose, though, that it’s possible that Professor Deneen means the predicted timing of peak oil doesn’t matter because the possible range of outcomes indicates that we will hit peak oil in 20 years at the most. Since I am not a petroleum geologist, I decided to check in with those morons who have actually studied this question. Apparently, Professor Deneen did not bother to read the links I provided to the forecasts from the DOE (estimates peak oil sometime in the “middle of the current century”), the International Energy Agency (only forecasts out to 2030, with rising production through that date) or OPEC (only forecasts out to 2030, with rising production through that date). So, what if we thought we would reach peak in 2050 (42 years from now), would that change what we should do? How about 2100?
What if we had reacted to the predictions throughout the 1970s and 80s that we would reach peak oil in about 2000? Do you think that some of these proposed changes would have slowed economic growth and prevented the world from being in the current position of paying an ever-dwindling share of total output for oil? What other difficult-to-anticipate changes might some of these interventions have had? Could the idea of purposely restructuring the transportation, housing and agricultural sectors of the U.S. economy based on a prediction for an event that we have proven to be very bad at predicting – and for which the world’s leading experts refuse to provide anything other than very broad guidance – induce a sense of humility? It does in me.
( cross-posted at The Corner )
Right on.
— Adam Greenwood · May 19, 06:11 PM · #
Two thoughts:
1) Is it more reasonable to believe that we will reach peak oil in the year 2500, plus or minus a couple centuries, or the year 2050, plus or minus a couple decades?
2) If the latter time frame makes more sense, doesn’t it make sense to at least adjust the consumption choices that our society makes collectively (e.g., highway funding vs. rail and mass transit funding) to that anticipated time frame — particularly given that building infrastructure generally takes decades rather than years?
— alkali · May 19, 06:24 PM · #
<i>What if we had reacted to the predictions throughout the 1970s and 80s that we would reach peak oil in about 2000? Do you think that some of these proposed changes would have slowed economic growth and prevented the world from being in the current position of paying an ever-dwindling share of total output for oil?</i>
What economic growth would that be? Outsourcing, the destruction of American manufacturing capability, and the creation of various bubbles don’t sound like economic growth to me.
— pb · May 19, 07:00 PM · #
“We will develop technological alternatives and find substitute fuels.”
I think this is the big assumption that people who are worried about Peak Oil tend to get worried about – it’s quite the handwave away of problems, the idea that a geek in silicon valley will be able to save us from our dependency of oil across the entire spectrum. As far as I look, there isn’t really a substitute out there for oil that is remotely cost-effecient. And I am quite skeptical about the Auto Industry (and other massive firms dominated by short-term dividends) being able to innovate themselves out of this one.
— Mike · May 19, 07:58 PM · #
“What economic growth would that be?”
I think you’ll have a hard time redefining “economic growth” this late in the game. If you’re using the standard definition — and I see no reason why you shouldn’t — economic growth is either true or false. In our case, it’s been true for a while now.
— JA · May 19, 08:44 PM · #
If the peak oil hypothesis is true – that we are within 20 years or so of an absolute peak of petroleum production – that raises the stakes on the need to develop alternatives to current uses for petroleum (fuel cells, coal-to-oil technology, sugar-based ethanol, corn-based plastics, etc). The level of consumption, however, is almost irrelevant; quite serious reductions in consumption would move the peak date only slightly. If peak oil worriers doubt the feasibility of these alternatives, period, then they really ought to run for the hills. If they doubt we’re spending enough on these alternatives now, so that the economic transition once prices begin to their relentless rise will be far more painful than it would otherwise need to be, then they should advocate more public spending on the relevant research – something I think Jim favors, by the way. If they doubt the price mechanism will work – oil prices will spike enormously, yet somehow inadequate resources will be devoted to alternative technologies – then I’m just puzzled why they are convinced the price mechanism won’t work.
Oil prices have spiked tenfold in a very short period of time. Whether or not the end of the age of petroleum is upon us, the end of the age of cheap petroleum probably is. Alberta has about as much recoverable crude in its tar sands to equal the reserves of Saudi Arabia, the world’s largest proven petroleum field; Venezuela has almost as much again. But it costs about $20/barrel to extract, versus less than $1/barrel for Saudi crude. And at higher price points, the amount of recoverable oil from these sources goes up further. So I’m very skeptical of the vertical price charts you sometimes see related to the peak oil hypothesis; the absolute amount of available oil is very likely to grow as prices rise, without positing any discontinuous technological breakthrough, and we likely will have a long period of rising price floors for petroleum before we need to worry about absolute shortages.
As for how long it takes to build new infrastructure: ask the Chinese. It doesn’t take long at all, if that’s the priority. It’s very likely that we will place a higher priority on not displacing millions of people, not wrecking the environment, etc. But that’s an indication that our needs will not be as desperate as the Chinese feel theirs to be, or than the most alarmist peak oil hypotheticals suggest ours will be.
— Noah Millman · May 19, 09:13 PM · #
RE Alkali:
I think the point Manzi is making is that we should apply a rigorous cost-benefit analysis to the economic consequences of adjusting our consumptive patterns to address the (highly speculative) impact of peak oil. Taxing oil consumption and heavily investing in infrastructure will reduce our potential for economic growth, which has the unpleasant side effect of reducing the availability of resources needed to combat catastrophic environmental degradation. I’m basically sympathetic to this point of view, and Manzi has cogently described how policy-makers should apply this framework to various environmental controversies (see, for example, his posts on global warming).
That being said, I think there are a few persuasive criticisms of this perspective:
1.) It privileges current economic growth over future environmental and economic consequences. Given the potentially catastrophic impact of peak oil (or global warming, for that matter), it might make sense to hedge our bets.
2.) There are positive economic and social consequences associated with adjusting our consumptive choices. I’m not sure how to quantify this, but moving away from strip malls and rush hour traffic sounds pretty damn good to me.
3.) I have a great deal of faith in a decentralized, market-oriented transition away from fossil fuels. One point a lot of peak oil theorists have made, however, is that once oil production has plateaued, total extraction will quickly decline due to a collapse in underground pressure and rising global demand for remaining petroleum supplies. Given an abrupt and precipitous reduction in global oil supplies, I’m less confident that our economy can quickly and successfully adapt to changing market conditions.
— Will · May 19, 09:14 PM · #
Will:
Re: your point #1: I agree this is a problem with cost-benefit analysis, but it’s very important to realize that the two things you are weighing – current growth and future environmental and economic consequences – don’t simply trade off against one another. Current economic growth may increase future environmental consequences – but it also may alleviate them if, for example, higher economic growth accelerates the development of new, cleaner energy technologies. If Jim assumes that there is always a technological solution out there to be found, it’s more striking to me that his critics assume that the downside of less economic growth is simply fewer (presumptively worthless) consumer goods, or that all the other downsides (more poverty and illness, less “good” technology like the internet) may be readily mitigated.
Re: your point #2: I don’t really disagree. I live in Brooklyn; I’m a big advocate of urbanism. But the right way to get there is to change the pervasive subsidies for sub- and ex-urbanization already in the system: subsidies for highways, subsidies for home ownership, etc. For that matter, I’m a strong advocate of shifting the tax burden away from wages and towards consumption, which, if you’re trying to discourage consumerism, I would think would be appealing. But none of this, so far as I can tell, has anything to do with the peak oil hypothesis.
Re: your point #3: I think I tackled this in my last comment about Alberta.
— Noah Millman · May 19, 10:02 PM · #
Will: I agree that’s the point he’s making. My general response is that demanding “rigorous” cost-benefit analysis as a prerequisite to any action is essentially a refusal to take any action under any circumstances whatsoever, because the numbers you’d actually need to conduct such an analysis — how much oil is left? how much of that can we actually burn given global warming? what will growth be? what technologies will be available? — are not knowable with any precision. The point of my version of the response was to suggest that there’s an ironclad case for doing something other than what we’re doing now, even if what that something is will need to be a matter of debate.
— alkali · May 19, 11:14 PM · #
Okay, I guess you have a point that no one really knows when Peak Oil will take place, but that doesn’t mean that Peak Oil won’t take place, and it certainly doesn’t mean that Peak Oil won’t take place sooner rather than later. (It’s my understating that ME countries grossly overestimate their reserves for obvious reasons.) But, regardless, Deneen’s views aren’t rendered moot by an argument over dates. It’s simply true that we are really wasteful in our consumption of oil and gas. Take it from a guy who spent the 90s driving 45 minutes to work and back every day! And that was not unusual.
Your point is well taken that crippling our economy to reduce oil consumption is unwise, but that’s a bit of a false choice isn’t it? I mean, we are spending 300 billion on a useless farm bill, right? At least that much a year on a (useless) war in the Middle East, as well. What if we carved out a bit from those boondoggles and spent it on infrastructure? Does saying that make me a hopeless radical lefty? Because, I gotta tell ya, it sounds pretty conservative to me and I think more and more people are starting to agree.
— Derek Sutton · May 20, 12:51 AM · #
RE: Noah Millman and Alkali
As I said earlier, I find Manzi’s cost-benefit analysis largely persuasive, including his assessment of the potential for economic growth and tech innovation to alleviate environmental catastrophe. There are two problems with Peak Oil that continue to worry me, however.
1.) The first issue is something Alkali alluded to in his last post. Although the impact of Peak Oil is entirely speculative, our probable response (assuming we do nothing now) is equally unknowable. No one can predict the trajectory of technological innovation with any certainty. Given what we know of modern history, I think the only precedent for our transition away from oil was our previous transition away from coal. Incidentally, that shift was facilitated in large part by our discovery of oil and its attendant applications.
But what if we just got really lucky? What if we are unable to replicate that transition ? I agree wholeheartedly that economic competition has an impressive track record when it comes to overcoming shortages, but even markets are subject to certain immutable physical conditions. Given the widespread application of petroleum-based substances, it may simply be impossible to find a resource that can adequately replace it within the next 20 years.
2.) I’m also not sure if your earlier post grapples with the sheer magnitude of the projected oil production drop-off. As Manzi pointed out in his earlier entry, current gas prices are roughly comparable to gas prices circa 1980 in inflation-adjusted dollars. In essence, we have retained all of the features of a petroleum-based economy while modestly supplementing our energy consumption with some renewable alternatives. Developing new renewable technology and extracting oil from the Canadian tar sands requires a sustained price signal to attract investment. If oil production plateaus and then abruptly collapses, the price signal would be overwhelmed by a rapid economic collapse that would quickly render our entire petroleum-based infrastructure obsolete. If we experience a sustained plateau in oil production that drives innovation while allowing for a gradual reduction in petroleum consumption, I’d have more confidence in our economy’s ability to manage the transition. But there really is no market-oriented precedent for rapidly developing an energy supply to replace a resource that literally powers every facet of our economy.
Like I said, I’m largely persuaded by Manzi’s ‘wait and see’ approach. But I’d be interested to hear your take on these specific problems.
— Will · May 20, 01:14 AM · #
One thing to keep in mind is that future discoveries of oil are not just trickier to find and exploit — many are less energy-efficient. With regard to Alberta, it’s not cash or expertise that extracts oil from tar sands — it’s heat. As I understand it, tar sands basically allow us to turn natural gas into transportation fuel.
The general equilibrium implications scare me, since this opens a new market for gas as a transportation fuel feedstock. Gas is already in high demand for heating and stationary power generation, and turning it into a complementary good with respect to petroleum will only drive demand higher. We’ve seen what happens when demand for corn gets linked to the price of oil — I’d hate to see the same thing happen to a resource with more inelastic supply (which I’m assuming is the case with gas).
— Matt Frost · May 20, 01:34 AM · #
“If you’re using the standard definition — and I see no reason why you shouldn’t — economic growth is either true or false.”
I don’t consider GDP to be an indicator of anything with respect to “economic growth.” It’s just a number, and a very misleading one, if one doesn’t look at what counts towards it.
— pb · May 20, 04:36 AM · #
“I don’t consider GDP to be an indicator of anything with respect to ‘economic growth.’
GDP is actually just a measure of economic activity—if you chop down a forest, the value of the lumber is added to GDP. There is no provision in the calculation of GDP (or within the mindset of our economic system as currently constituted) to treat this activity as a reduction of assets (i.e. the loss of the forest). Similarly, GDP growth that results from increased production ceases to seem to be an unmitigatedly good thing if one looks at production as a cost of maintenance. Heck, the Exxon Valdez cleanup counted towards GDP growth when it occurred. Creating the crap floating in our fish bowl and cleaning it up are both considered “economic growth”. Double bonus!
These accounting issues are irrelevant when the economy is small compared to the larger systems (biological, geological, etc.)upon which it depends. There are now abundant indications, however, that the economy is approaching a size larger than the planet’s ability to provide it raw material (peak oil, peak copper, peak high quality lumber at your local lumber yard, etc.) and absorb it’s wastes (global warming, ocean dead zones, mass extinction, etc). But you would never know it by looking at our accounting system. Party on dude!
— DMonteith · May 20, 08:54 AM · #
Jim, I broadly share your views on the environment. Peak oil is an interesting concept to me, because once we run out of oil (surely a long time off, unfortunately), we will have to go for the next best energy source, and that happens to be the He3 we need for efficient cold fusion. And where are the most plentiful, near sources of He3? In the giant gaseous planets of our solar system. So peak oil will be the time when we finally decide to go into mass space exploration. Which is why I’m actually looking forward to it.
— PEG · May 20, 09:03 AM · #
Why is it a reigning assumption that a transition to a post-petroleum economy is going to be wrenching, as opposed to merely expensive?
My impression is that there are off-the-shelf replacements for most of the big petroleum products: gasoline, plastics, heating oil, fertilizer; I’m not sure about jet fuel. Some of these are less energy-efficient than petroleum, and all had trouble with price competitiveness until recently. But energy != petroleum, and at the sort of price level we’re seeing now, to say nothing of the prices we’d see if we start to near peak oil, all sorts of things would turn competitive. Investment in Alberta’s tar sands has skyrocketed. So has investment in sugar-based ethanol (which America can’t produce economically, but many other countries can, and do you really think Florida’s sugar lobby has the clout to destroy our civilization?).
I don’t think I’m being pollyanna; I want to skew our system away from petroleum and away from overconsumption and so forth, and I happen to think there are low-hanging fruit to do that. But I just don’t see the reason for panic.
— Noah Millman · May 20, 10:57 AM · #
As I began my personal investigation of this issue the single reality which took me by surprise, and a great deal of time to wrap my head around, is the almost unfathomable energy density of oil. There is nothing else like it, and no alternative can come remotely close.
Review the concept of the Cubic Mile here: http://spectrum.ieee.org/jan07/4820/ncmo01 and here: http://www.theoildrum.com/node/2186 This work was done by the respected IEEE, the world’s largest professional technology association.
As an example, to equal the energy output of one year’s worth of oil, about one cubic mile, you would need to construct 52 nuclear power plants …each year, for 50 years! That’s 2,600 installations total (there are just 429 world-wide presently). The sobering reality is that there is not enough time, uranium, or money to come within a fraction of our energy demands using nuclear, even with other sources in consort. The same applies to other alternatives, singularly or in combination.
Some see the ethanol, tar sands, shale oil, and drilling at sea 7 or 8 miles down as an incremental extension of normal oil exploration. I see it as desperation, like scrounging for loose change between the couch cushions.
The problem is unrestrained, exponential population growth. There are about 6.5 billion of us today with another 3 billion projected within 30-50 years. If you think we are constrained right now, imagine what the consequences will be with a third more people vying for the same finite resources. In short, it won’t be possible.
— David J. McCartney · May 20, 12:47 PM · #
David:
Currently, about 40% of our energy usage is from oil and about 8% from nuclear. France’s energy consumption is about 37% nuclear; about 78% of their energy production is nuclear, but they export electricity and import oil; their consumption of oil is roughly equal to their consumption of nuclear, each as a percentage of total energy consumption. So, clearly, you don’t need 2600 nuclear power plants to equal annual oil consumption. In France, you need exactly as many power plants as they have; in the US, you need five times the number of power plants we have. If oil were so much more efficient than any other conceivable energy source, we wouldn’t use anything else. But we do – in fact, we mostly use other sources. Clearly, the analysis that the IEEE did – and none of your links actually say what that analysis was, they just show the conclusions – is flawed in some fashion. I would love to see the analysis itself and try to determine what that flaw might be. I suspect it has something to do with extrapolating from energy density directly to energy efficiency, which is in no way a valid extrapolation. But I’m not sure that’s it either, because fissile material has the highest energy density of any energy source on earth (it just takes huge inputs to get that energy out). Basically, I have no idea what the IEEE were doing to get to their conclusions.
Of course, my analysis above is also flawed, because you can’t simply replace one energy source with another. We use oil primarily for transportation, because, as you say, it’s a very dense energy source, so it works especially well in any context where you have to carry your fuel with you. You can’t carry a nuclear power plant with you, and we don’t (yet) have a sufficiently efficient mechanism for storing electricity (e.g., in fuel cells) to power surface transportation (nor have we built out a network to service such vehicles). What you really want to do is compare the cost of producing a given amount of energy from petroleum with the cost of producing a similar amount of energy from other sources, in each case comparing similar use – thus, if we’re talking about generating electricity, you’re comparing an oil-powered plant versus a dam, a wind farm, a nuclear plant, and a coal plant, and in each case energy density won’t be a very important factor; but if we’re talking about powering automobiles you need to assume a certain energy density of the power source (because you can’t carry a nuke plant or wind farm with you), and either produce such sources directly (e.g., grow sugar cane for ethanol) or use other sources to produce such a dense energy storage system (e.g., turn compost into methane or nuclear energy into fuel cells), and make sure you’re keeping track of all the costs of the various sources along the way (it takes energy to build and run a nuclear plant, and to produce fuel cells; it takes energy to grow and harvest sugar cane, and to process into ethanol; it takes energy to extract petroleum, and to process into gasoline; etc.).
In any event, ethanol has a bit under 50% the energy density of petroleum (25 MJ/kg versus 45 MJ/kg for petroleum). Natural gas has nearly as high a density as petroleum – around 37 MJ/kg. Methane has a higher energy density than petrolum – about 55 MJ/kg. So there’s nothing magic about the energy density of petroleum, and no reason to assume that no other energy sources out there can come close to it.
There’s an OK Wiki on the concept of energy density here.
— Noah Millman · May 20, 02:07 PM · #
Noah,
You’re correct — energy != petroleum, but projects like the Alberta tar sands are an attempt at changing that. I’m not a peak oil guy, and I tend to subscribe to the Jim Manzi/Indur Goklany line on climate change, so carbon emissions don’t factor into my decision, either. But I don’t like shoveling all our energy resources into a giant hopper that squirts out expensive transportation fuel.
— Matt Frost · May 20, 02:54 PM · #