Month: May 2014

Peak Oil: A Valid or Invalid Concept?

One topic that has come up consistently in my 40+ years of reading and thinking about energy is the notion that the world is running out of fossil fuels. The reality, as best I can tell, is that this is not true on any near-term timescale. Fossil fuels are finite and we are using them faster than nature can replace them, but much remains to be found and utilized if people wish. The concerns stimulated by H. King Hubbert in 1956, when he proposed his theory on oil well production and depletion and published the ‘Hubbert Curve’ (see below) are valid for some assumptions but ignore other realities that make his conclusions, and those of others who have accepted his theory, invalid for long-term planning. I will explain why I believe this in the discussion that follows, recognizing that part of the discussion turns on a definition of what is meant by Peak Oil.

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A 1956 world oil production distribution, showing historical data and future production, proposed by M. King Hubbert; it has a peak of 12.5 billion barrels per year about the year 2000

Hubbert’s Peak Theory is based on the obvious fact that the utilization of a finite resource must go through an initial start-up, reach a peak level of production, and eventually tail off as the resource is depleted. This is common sense, applicable to all non-renewable resources, and not disputable. What is disputable is the shape of the production/depletion curve and the assumptions that went into identifying the resource to be utilized and eventually depleted. Much of the public discussion that has ensued about Peak Oil, the application of Hubbert’s theory to oil (petroleum) extraction, since publication of Hubbert’s 1956 paper has revolved about these two facets of his theory.

It is important to clarify up front that Peak Oil is the point in time when oil extraction reaches its maximum rate and is not synonymous with oil depletion. Following a peak in extraction rate about half of the resource is still available for extraction, and production rate decreases steadily thereafter. Much discussion has focused on the shape of the declining curve after Peak Oil is reached – plateau? sharp decline? slow decline? – and the implications for the U.S. and world economies that are so dependent on oil supplies.

Hubbert’s theory received great visibility when he correctly predicted, in his 1956 paper, that U.S. domestic oil production would peak between 1965 and 1971. He used the terms ‘peak production rate’ and ‘peak in the rate of discoveries’; the term Peak Oil was introduced in 2002 by Colin Campbell and Kjelll Aleklett when they formed ASPO, the Association for the study of Peak Oil & Gas.

Where the application of Hubbert’s theory has failed (I don’t blame him) is in the boundary conditions (assumptions) on which his theory is based. He did not anticipate, nor did others, the rapid emergence of unconventional oil and the substitutions for oil (alternative fuels, electrification of transportation) that have been or are being developed. He did mention these possibilities and did his best with the information available at the time; I cannot say that about modern Peak Oil theorists who still put out stories intended to scare.

What has changed is that oil production no longer depends only on ‘conventional’ oil supplies but increasingly on ‘unconventional’ resources that are an increasing part of total oil supply. A few definitions, courtesy of Wikipedia, will help:

“Conventional oil is oil that is generally easy to recover, in contrast to oil sands, oil shale, heavy crude oil, deep-water oil, polar oil and gas condensate. Conventional oil reserves are extracted using their inherent pressure, pumps, flooding or injection of water or gas. Approximately 95% of all oil production comes from conventional oil reserves.

Unconventional oil is oil that is technically more difficult to extract and more expensive to recover. The term unconventional refers not only to the geological formation and characteristics of the deposits but also to the technical realisation of ecologically acceptable and economical usage.”

Given these definitions, we can probably all agree that the age of cheap oil is over, as reflected in the following graph of historical oil prices:
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As reported by former BP geologist Dr. Richard Miller in a speech at University College of London in 2013: “..official data from the International Energy Agency, the US Energy Information Administration, the International Monetary Fund, and other sources, showed that conventional oil had most likely peaked around 2008.” He further pointed out that “peaking is the result of declining production rates, not declining reserves”, that many oil producing countries are already post-peak, and that conventional oil production has been flat since about the middle of the past decade. There has been growth in liquid supply since then, largely due to natural gas liquids and oil derived from oil sands. Reserves have also been growing due to new discoveries, improved oil field extraction technology, and increasing reliance on unconventional resources.
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The debate about Peak Oil has been underway for quite a few decades, many words have been spoken and much ink has been used to illuminate and document that debate, and Peak Oil still has its adherents. One of my purposes in exploring this subject for my blog was to review the latest literature and form an updated opinion. I have – Peak Oil is not real if you take into account the full liquid fuels situation. In fact, in the course of my research I have come across several opinions that I fully agree with and share them with you as my summation of this post.

(Wikipedia)”In 2009, Dr. Christoph Rühl, chief economist of BP, argued against the peak oil hypothesis:

Physical peak oil, which I have no reason to accept as a valid statement either on theoretical, scientific or ideological grounds, would be insensitive to prices. (…) In fact the whole hypothesis of peak oil – which is that there is a certain amount of oil in the ground, consumed at a certain rate, and then it’s finished – does not react to anything…. Therefore there will never be a moment when the world runs out of oil because there will always be a price at which the last drop of oil can clear the market. And you can turn anything into oil into if you are willing to pay the financial and environmental price… Global Warming is likely to be more of a natural limit than all these peak oil theories combined. (…) Peak oil has been predicted for 150 years. It has never happened, and it will stay this way.

According to Rühl, the main limitations for oil availability are “above ground” and are to be found in the availability of staff, expertise, technology, investment security, money and last but not least in global warming. The oil question is about price and not the basic availability. Rühl’s views are shared by Daniel Yergin of CERA, who added that the recent high price phase might add to a future demise of the oil industry, not of complete exhaustion of resources or an apocalyptic shock but the timely and smooth setup of alternatives.”

One other opinion I agree with, by George Monbiot, writing in the guardian on 2 July 2012 (‘We were wrong on peak oil. There’s enough to fry us all’): “Some of us made vague predictions, others were more specific. In all cases we were wrong. In 1975 MK Hubbert, a geoscientist working for Shell who had correctly predicted the decline in US oil production, suggested that global supplies could peak in 1995. In 1997 the petroleum geologist Colin Campbell estimated that it would happen before 2010. In 2003 the geophysicist Kenneth Deffeyes said he was “99% confident” that peak oil would occur in 2004. In 2004, the Texas tycoon T Boone Pickens predicted that “never again will we pump more than 82m barrels” per day of liquid fuels. (Average daily supply in May 2012 was 91m.) In 2005 the investment banker Matthew Simmons maintained that “Saudi Arabia … cannot materially grow its oil production”. (Since then its output has risen from 9m barrels a day to 10m, and it has another 1.5m in spare capacity.)

Peak oil hasn’t happened, and it’s unlikely to happen for a very long time.”

Enough said!

Peter Varadi’s New Book: ‘Sun Above the Horizon’

I have had the privilege of being Peter Varadi’s friend for the past several years, and am pleased to bring this important book to your attention. It is a unique and valuable contribution to the history of solar photovoltaics (PV) authored by a true solar energy pioneer.

I will let his brief bio speak for itself: “Peter F. Varadi escaped from Hungary in 1956 and after a distinguished scientific career was appointed head of the Communication Satellite Corporation’s (COMSAT) chemistry laboratory in the U.S. in 1968. In this function he also participated in research on photovoltaic (PV) solar cells, which were used to power the satellites.
In 1973 he co-founded SOLAREX Corporation, Rockville, MD (USA) to develop the utilization of solar cells (PV) for terrestrial applications. SOLAREX was one of the two companies which pioneered this field. By 1983 it had become the largest PV company in the world when it was sold to AMOCO. Following that he continued consulting for Solarex for 10 years and after that for the European Commission, The World Bank, the National Renewable Energy Laboratory, and other solar energy organizations.
In 2004, in recognition of his lifelong service to the global PV sector and his continuing commitment striving for excellence in the PV industry, Dr. Varadi received the European Photovoltaic Industry Association’s (EPIA) John Bonda prize. He is a Fellow of the Washington Academy of Sciences.”

I have also had the opportunity to review Peter’s new, 548 page, book prior to its publication by Pan Stanford Publishing in paperback on May 23d ($24.95) and in hard cover ($69.95) on June 10th. At Peter’s request the book is being offered at a 20% discount ($19.96 and $55.96) and free shipping until August 31st. To obtain this discount please go to:
http://www.crcpress.com/product/isbn/9789814613293 (paperback)
http://www.crcpress.com/product/isbn/9789814463805 (hard cover)
In both cases use the special saving code PAN01 (numeric zero).

I believe the best way to express my enthusiasm for this book is to reproduce some of my review comments submitted to the publisher:

“The book is a unique contribution to the history of solar PV electricity, an energy technology that is transforming the way we generate and use electricity. No other book that I know of puts this history together.

As someone who is intimately familiar with the development and deployment of renewable energy technologies, which I have been studying and working on since 1969, I can nevertheless truthfully say I learned a great deal I did not know about the PV industry’s early years and its subsequent expansion into a critical part of the world’s current and future energy system. The audience for this book will include lots of people like me who have lived through these early days and can relate to much of the history, but also the rapidly increasing number of people in the PV industry around the globe, and the growing number of young people, all over, who are committed to cleaner energy systems and will enter the field. This includes technically-oriented as well as business-oriented people who will benefit greatly from Peter’s wise business insights. In my opinion, as a former academic, it is also textbook material at several academic levels.

I might add that the environmental, development, and public health communities will find the book useful as well as they apply photovoltaics to providing basic human energy needs, reducing carbon emissions from power generation, and helping provide potable water for drinking, sanitation, and food production.”

“”Based on some personal experience teaching at various levels, I could see this book being used as supplementary, and even primary, reading in high school, undergraduate and graduate courses. This would include a broad range of students, both technical and non-technical, and I could easily see myself using this book in an energy course I would teach. It would also have a history and government audience.”

“PV is a powerful transforming technology that is being increasingly applied in both developed and developing countries. The audience for this book will be global.”

“I am unaware of any other book that addresses this history as comprehensively as this book does. It also benefits greatly from being written by a true pioneer who helped create a new and critically important industry. It is a history that needed to be told and I can think of no one better than Peter Varadi to tell it.”

You can tell that I am enthusiastic about this book. It has a structure that carefully lays out the history and anticipates the future.

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Africa’s Energy Future: A Dynamic Part of the 21st Century

Africa is the world’s second largest continent, smaller in land area only to Asia. It’s population, at 1.1 billion in 2013, ranks second as well to Asia and accounts for about 15% of the world’s human population. It is a continent with serious problems as well as significant potential for addressing many of these problems in the decades ahead. Critical to this potential is development of Africa’s energy resources.

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An important fact about Africa, which has 54 countries and 11 other ‘territories’, is that its population is the youngest among all the continents: more than half of Africans are less than 20 years old. Algeria is the largest African country by land area, while Nigeria has the largest population (174 million). The continent’s population grew 73% between 1990 and 2013, is estimated to top 2 billion in 2050, and The World Bank has declared “..25 of the 54 countries to be in an energy crisis.”

What is the current status of Africa’s economy and its energy production and consumption? The World Bank estimates that in 2012 Africa’s economy was one sixteenth (6%) of the U.S. economy, and that Africa’s infrastructure is “..the most deficient and costly in the developing world.” In Sub-Saharan Africa (SSA) only about 25% of the population has access to electricity, in contrast to about 50% in South Asia and 80% in Latin America and MENA (Middle East and North Africa). In addition, electricity has reached only wealthy, urban middle class, and commercial sectors, bypassing rural and urban poor populations – e.g., less than 2% of the rural poor in Malawi, Chad, Niger, and Ethiopia have access to electrical power. And even in areas covered by the grid electricity supply is often unreliable. Total energy consumption in Africa is about 5,000TWh (16 quads), just 3% of global consumption.

Low levels of electrification occur despite the fact that Africa is rich in energy resources. Unfortunately, most of these resources remain untapped and, overall, Africa is a net energy exporter (40% in 2009).

What are these resources and where are they located?

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South Africa, a unique country in Africa in terms of developing its energy resources, has the globe’s sixth largest known coal reserves and most of its electricity today is derived from burning coal. It also has large renewable resources (solar, wind, hydropower, biomass, wave energy) that, so far, it has had little motivation to develop. More generally, the African Energy Policy Network estimates that Africa has the world’s third largest crude oil reserves (behind the Middle East and Latin America), the third largest traditional natural gas resources (behind the Middle East and Europe), the second largest uranium resources (behind Australia), and lots of hydropower and other renewable energy resources. To date less than 10% of these hydropower resources have been tapped, and well under 1% of the geothermal resources. Africa’s renewable energy potential is discussed in more detail below.

An important meeting of African Energy Ministers took place in Johannesberg, South Africa in September 2011, to prepare for the upcoming COP 17, the 17th Conference of the Parties of the United Nations Framework Convention on Climate Change to be held in Durban later that year. It produced an eloquent declaration that identified “..priorities for supporting Africa’s energy development agenda in a sustainable manner”. Included among these priorities was “Prioritising clean energy: Africa is richly endowed with renewable energy resources – many of which may be developed in support of a low-carbon future for the continent. With the support of financing, technology and institutional capacity building from developed countries Africa will be able to greatly enhance its economic, social and environmental development using a diversity of clean energy sources.” Several institutions have accepted the challenge of helping Africa in its development, including the African Development Bank (AfDB), the World Bank (WB), as well as the U.S. Agency for International Development (USAID), corresponding organizations in the European Union and its member states, and in other developed countries. All have recognized that Africa is at a crossroads with respect to its future energy development and the resultant impact on economic development. Solutions will require distributed renewable energy generation as the only practical means of meeting rural electrification needs, boosting cross-border power trade, improving the infrastructure capabilities and management of existing electric utilities, and assistance in planning low-carbon development paths. Putting this issue in context, H.E. Andris Piebalgs, Commissioner for Development Cooperation with the European Commission (AEEP/Africa-EU Energy Partnership) has stated: “No energy means no sustained or sustainable economic growth, no sustainable agriculture, no quality healthcare, no decent education. In short, no energy means no development.”

The renewable energy resources are extensive, but in most cases not yet well documented. There is a critical need for resource assessment in Africa, an essential step in developing bankable renewable energy projects. While resource assessment costs are small compared to the eventual costs of large scale deployment, it is often overlooked early on, as it was in the early days of renewable energy development in the U.S. It took several years to obtain adequate funding from the U.S. Congress for DOE’s resource assessment program.

Most parts of Africa receive more than 300 days per year of bright sunlight, which corresponds to more than 80% of Africa’s land area receiving 2,000 kilowatt-hours (kWh) per square meter per year. This is comparable to the numbers for the most solar-intensive parts of the best solar energy states in the U.S. (New Mexico, Arizona and California).

Hydropower is another large renewable energy resource in Africa that is only being partially tapped.

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Currently installed capacity is 20,300MW, with another 2,400MW under construction. More than 60,000MW are being planned, with an estimated theoretical potential of 1,750 TWh of energy delivery.

African wind and wave energy resources are also large. Africa has a very large coastline, where wind power and wave power resources are abundant but poorly assessed and underutilized in the north and south. While the 1,100MW of installed wind power on the continent currently makes up only 1% of total electricity supply, at least another 10,500MW are in the pipeline and much more is expected. Most of this activity is on Africa’s western coast.

Geothermal resources are abundant as well, as shown in the following map:

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It is mostly concentrated in the area of the East African Rift, a 3,700 mile long geological feature that stretches across thirteen countries from Eritrea in the north to Mozambique in the south. With the exception of Kenya, which is one of the top 10 producers of geothermal energy in the world (250MW installed; another 280MW scheduled for commission in 2014) geothermal exploration and development has been limited. Kenya’s estimated geothermal potential is about 10,000MW. In contrast, other countries that straddle the Rift Valley have carried out no or limited exploration of geothermal resources. Ethiopia is the only other Rift Valley country to have installed geothermal power generation (currently 7MW but under expansion to 70MW).

Finally, Africa has tremendous potential for utilization of biomass energy, its oldest and most widely used source of energy, but to date this resource is also poorly assessed. IRENA, the international Renewable Energy Agency with headquarters in Abu Dhabi, supported a literature review and published a report in 2013 (‘Biomass Potential in Africa’) that concluded that “Due to the large range in results presented by the reviewed studies, no definite figures regarding the availability of biomass can be provided.” This needs to change if decision makers are to make appropriate use of this widely abundant resource.

I will conclude this brief overview of energy in Africa by quoting the Director General of IRENA, Adnan Amin. In an article published just a few days ago in the journal ‘TheNational’ (‘Renewable Energy will power Africa’s ambitious future’) he states: “Africa is blessed with plentiful land and natural resources. Prodigious sunshine blankets the continent for much of the year, ideal conditions for solar power. Hot rocks in areas such as the Rift Valley store geothermal energy. Vast plains and mountain ranges are great sites for wind turbines while mighty rivers like the Zambezi can be harnessed for hydropower projects. Finally, biomass is abundant – all providing multiple opportunities for renewable energy production.”

I will also quote from a brief speech to the Brookings Institution in February by U.S. Senator Chris Coons of Delaware: “From urbanization and economic growth, to public health and energy, Africa is developing at a pace that rivals nearly every other region of the world. It is truly the continent of the 21st century. ” Clearly, Africa’s exciting energy and development future awaits.

Am I Still An Environmentalist?

This piece has been a long time coming. The reason I raise the question is simple: my recent public statements in favor of approving the Keystone XL pipeline and that fracking is here to stay for a while and we need to act accordingly. The question I’ve asked myself is: does taking these positions override a lifelong professional commitment to clean energy and environmental protection in environmentalists’ eyes? In mine it does not. Both positions are strongly opposed by vocal and perhaps significant fractions of the ‘environmental movement’. What that fraction is is not clear. I also wish to offer some unsolicited advice to my fellow environmentalists to help ensure that environmentalism will continue to flourish in the years and decades ahead.

First a little background. I’m a trained scientist (physics) who started thinking about clean energy (solar, wind, ..) in the early 1970s and have spent most of my professional career helping to prepare these technologies for wide scale deployment. I’ve also worked hard to advance energy efficiency as the cornerstone of national energy policy.

My involvement in planning and management of renewable electric programs at the U.S. Department of Energy, from which I retired in 2012, exposed me to some of the less attractive realities of the renewable energy world, such as solar energy advocates denigrating wind energy, and vice versa. I reacted strongly at the time, seeing such self-interested behavior as damaging to the long-term interests of the nation and the renewable energy community. I now fear for the long-term interests of the environmental movement as I see parts of it putting what I consider too much energy into battles that it cannot win. In my opinion this can only harm the movement’s image with the public and thus environmentalism’s needed and long term impacts.

Why do I feel this way? Despite my strong belief that the U.S. must reduce its heavy dependence on fossil fuels as quickly as possible, for environmental, economic and national security reasons, and that we must move as quickly as possible to an energy future based on renewable energy, my sense of reality is that this cannot happen tomorrow and that the public recognizes this, despite their often-repeated enthusiasm for renewables. The public wants leadership and a clean energy future, but it also wants energy, the services energy makes possible, and a realistic path to that future. When environmentalists and others imply that our current dependence on fossil fuels can be undone in a decade or so I take strong issue. It will take decades, even with a willing Congress, and fuels derived from petroleum will still be needed to move our cars and trucks while we move to develop alternative fuels. The Keystone XL pipeline will not reduce Canadian mining and production of its tar sands, the rationale behind environmental opposition to the pipeline, and I’d rather have that oil coming to the U.S. via a modern and highly regulated pipeline than via truck and rail and barge.

We have made significant progress in reducing carbon emissions into the atmosphere by replacing coal with natural gas in power production, but solar and wind and geothermal and biomass and hydropower and ocean energy are not yet ready to take on that full burden. We need natural gas as a transition fuel to our clean energy future, even though its combustion still releases CO2. It is still much better than burning coal, and careful regulation and enforcement of fracking can minimize the amount of natural gas, a powerful greenhouse gas, that leaks into the environment.

Finally, I recommend that my environmental colleagues join with me in putting our energies into making sure that the pipeline and fracking are done as well as possible, that national policies encourage maximum utilization of energy efficiency to minimize energy and water demands, and that a steadily increasing price is put on carbon emissions. All these points are essential, but this latter point to me is critical. Without a clear signal to all sectors of our economy that we must reduce carbon emissions to avoid the worst impacts of global warming and climate change we are being irresponsible to ourselves and succeeding generations. Such a price on carbon can unleash innovation and set an example for the rest of the world which still looks to the U.S. for leadership.