Oil prices, looming energy problems and oh yes, Peak Oil.....

[afransen]

Also, unlike engines for cars which can be modified for alternative fuel, jet engines cannot. Apparently.

Nonsense. There have already been test flights using blended biofuel in commercial aircraft and I believe one using pure biofuel. I'm sure it has some bugs to work out, and supply won't meet demand, but it's not impossible. I also hear that there is a scheme to build a hydrogen powered jet engine, which is probably the most practical alternative (not enough biofuel). Hell, if you throw enough energy at it, one could make synthetic jet fuel.

 

[PukeGreen]

Regarding shortages: true there is no immediate shortage of oil in the world. There's lots still left and it will continue to be drilled and refined for decades. However, there are two major long-term trends that are pushing prices up: 1) less and less oil remains in the world, and what remains is becoming more difficult and hence more expensive to obtain, like the oil sands, and 2) demand for oil is increasing very rapidly as formerly poor economies like India and China ramp up and millions more begin driving and living a "Western" lifestyle.

Unless something changes these factors drastically, which seems unlikely, these forces are permanent and the price of oil will continue to rise over time, short term variations aside. I disagree that this can be called a "bubble" since I can't see how it will "pop". Oil is traded on a free market which is essentially a futures market (traders buy and sell based on what they *think* the price of oil will do in the future) so prices will always rise ahead of actual shortages: just the expectation that shortages may be coming is enough.

Regarding biofuels: they are in fact usable for both cars or planes, but there is a growing realization that they will not save us. Already subsidies for growing palm and corn to convert to fuel are backfiring. So many farmers have been growing corn in the US over the last few years that it is pushing out other crops, like wheat, and pushing up the cost of all foods, since most of our food is derived from corn. This is causing inconvenience in Western supermarkets, and disaster in poor countries where many simply can't absorb any increase in food prices. The other disastrous consequence is environmental: as subsidies push up the value of palm oil, farmers in poor tropical nations are rapidly clear-cutting vast swaths of jungle to make room to grow palms for oil production. The clear cutting, reduced rain forest, and production of the ethanol is more than canceling out the perceived environmental benefits that switching to biofuels is supposed to bring us. The other fact is that to grow the massive amounts of corn (or any vegetable matter) required to derive enough biofuel is not possible without tons of articial fertilizers derived from petroleum.

Regarding hydrogen fuels: current methods of productions require vast amounts of water and electricity. Most electricity in North America comes from coal-fired plants. Not a very green or cost-effective alternative at this time.

In short, there is no quick fix: we need to use less oil and gasoline, which means changing our lifestyles, driving less often, driving smaller cars, rebuilding our crappy public transit infrastructures (and giving people incentives to use them) and changing our idiotic zoning laws to allow people to live without driving everywhere. This change is being zealously resisted at every stage, but the longer we leave it, the harder it will be. The "good" news is that soon gas prices will shoot so high that people will be forced to move beyond merely grumbling at the pump into a zone where they seriously are unable to afford to pay the prices: then, finally, change will start. But it will get ugly in the meantime. I don't believe in a Kunstler-esque great emergency or economic collapse, but I do believe many years of tougher times are ahead.

Sorry for another long post... seems to always happen....

 

[dowlingm]

The US Air Force has flown a B-52 with kerosene made from coal (the Fischer-Tropsch process used by Germany in the war and later South Africa during sanctions).

The Virgin 747 trial was using a sort of coconut oil I think.

The sooner we get on with stuff like building new nuclear, cladding apartment slabs with solar/rooftop turbines and electrifying the GO train lines and maybe even buying trolleybuses, the better. The only thing that's better than using less fossil fuels is using none.

 

[afransen]

In the total cost of owning a car, fuel prices are relatively minor. Even if gas prices triple, it will only put a slight dent in auto usage.

 

[Hydrogen]

The internal combustion engine and gasoline/electric hybrid still has considerable room for improvement. Automobiles can be manufactured to be much lighter in weight as well. Finally, there are more than enough opportunities to introduce electric vehicles for short distance fleet service.

High gas prices are bad if one is driving the type of vehicle that amplifies that cost.

 

[tkip]

The question is....

Whether we as a society have enough time to properly make the switch over to alternatives and modified engines before the escalating costs become too high to absorb.

PukeGreen was absolutely right in pointing out that our lifestyle will have to change and our habits along with it to avoid prolonged pains associated with slowly dwindling supplies of oil which has made everything we take for granted possible.

Everything.

I was shocked at realizing just how much of everything in our homes, our medicines and food, etc. is dependent on or derived from oil. Factor in the exploding growth of China and India and their energy needs and you get the picture.

Out of curiousity. Just how much fuel does the average jet engine consume? I've heard that it's huge. My understanding is that though we have plenty of oil left, the reality is starting to set in that there's very little cheap oil to be extracted to meet the energy demands of the globe. Nevermind america.

Apparently the single biggest reason the Alberta tar sands projects exists. As somone mentioned in a article, you don't spend this much money and put that much resources into trying to extract heavy and expensive oil unless you think there really isn't cheap oil left to extract elsewhere.

With oil hovering around $109/barrel and predictions of $1.50 by summer at the pumps, I think the reality of cheap oil no longer being cheap is starting to now appear. I too don't believe that the economy is going to collaspe or something like that but I do think the good times are about over.

 

[Earlscourt_Lad]

Not entirely unrelated, while reading this thread I thought to myself how much would gas have to increase before I take the TTC to work?

I live in the Dufferin and St. Clair area, and I work at Langstaff and the 400. It currently takes me about 20-30 minutes in the morning and 30-40 minutes in the afternoon, door to door. Let’s call it an hour for ease of calculations. By bus, the best route I can figure is getting the Jane bus all the way up to Langstaff, now I reckon that will take at best 1.5 hours door to door one way. Feel free to correct me on that, if you can determine a better route.

With the car I spend 5 hours a week commuting for a cost (exclusive of maintenance and insurance) of about $40 in gas. Now for $0 a week in gas I would have to spend, conservatively, 15 hours a week commuting. I’ve discounted insurance ($150/month) as it offsets a TTC pass plus the additional cost of going north of Steeles (as is my understanding). Allowing $10 a week in maintenance costs takes my total car driving costs to $50 a week.

So to save $200 a month in driving costs I would have to expend 40 hours extra in commuting, in essence paying myself $5 an hour to ride the bus. So, do I want to put in an additional work week per month for $200? Not at all. By these numbers, gas would have to be in the $3/litre range for me to even consider it on financial terms.

That’s a really flimsy analysis, but if someone can make a sound economic case for transit, I’d be glad to hear it. Keep in mind, I’m a fan of public transport, and I would use it should it make sense. However, I do suspect many people like myself can’t buy the gas will get so expensive that I’ll have to switch argument. At least not anytime soon, and given the current transit options.

 

[Archivist]

I've been reading about Peak Oil for a long time now, and strongly believe in it. I few misconceptions:

1) Peak Oil is not about when oil "disappears", it is simply the point at which we have lost the capacity to produce more in response to demand. It is not particularly debatable that oil production in any given area follows essentially a bell curve, it rises, levels off, and then falls. This process, though it may be affected by political events, has never been changed within any particular area through new discoveries. World oil extraction on dry land peaked quite a few years ago and is now following the bell curve down. No new discoveries are coming to replace that oil. Oil extraction underseas has stepped in to fill the gap.

2) Anybody who says they can predict a global peak (or conversely, that it won't happen), is blowing smoke out of their nether regions. Many countries that produce a lot of oil are very unforthcoming about their reserves, etc., and really, no one has hard data. That in itself is alarming. However, you ought to know that it is possible to measure quantities of oil extracted in the past with some accuracy, and to date the most extracted in any given month was in May, 2005 (although from early figures it looks like December 2007 might have been more). In other words, world production of oil has been at a plateau for several years. Is this because OPEC is holding back but could produce more? No one knows. You will not read this in the business pages.

3) The economic effects of Peak Oil are unknown but are quite likely to be severe. There are a lot of weird doomsayers out there who have low credibility, but you ought not pick up the Globe or the Post, read the business section, and conclude that everything will be OK. Certain elements of our current way of life will almost certainly change enormously - especially when it comes to cars and airplanes. Food will certainly become much more expensive. Overall, I think it is safe to say that the end of cheap oil will have an impoverishing effect on most of us, starting of course as always with the already poor, but spreading throughout the world.

4) Alternate forms of energy will NOT step in and fix this. Planes on biofuel are a joke - as it was pointed out in the recent flight from Britain, for the fleet of planes for that airline alone, the entire landscape of Great Britain would have to be given over to producing fuel for just that one carrier at their current rates of travel. It's not going to happen. We have some options around different forms of energy to heat our homes and do some other things, but much of what in the air right now is not especially scalable or robust enough to step up to the plate. Another problem with alternate forms of energy is that people tend to both overestimate the extent to which one form of energy is replaceable with another (yes, planes do need jet fuel) and underestimate the extent to which various forms of energy are already interrelated (ie., how many Ontarians need to plug in their electric cars before we need seven more power plants burning natural gas or oil so that the lights don't go off).

Anyways, I suppose it's anyone's guess what will happen, but as someone who's been following the debate for years it seems to me that some of the "Peak Oil" people are extremely credible and in fact cautious in their pronouncements, while most of those who scoff at the idea seem either boorish and uninformed in their "business as usual" approach, or have some kind of agenda as so many of the Climate change deniers do.

One of the best presentations on the issue is here. Very low key, very carefully stated, nothing bombastic, but indicating that we might be in for some rocky times. I'd look through the slides for the February 4 presentation. Very interesting.

 

[unimaginative2]

That's a fantastic summary, Archivist. I read Twilight in the Desert a couple years ago, and I found it fascinating and quite persuasive. He may well be off by a couple of years, but the decline of Saudi production in recent years certainly bears out his thesis.

 

[EnviroTO]

Out of curiousity. Just how much fuel does the average jet engine consume? I've heard that it's huge.

It is a lot per flight but not a lot when you divide it by passenger kilometres which is the more important figure. The bigger problem with aviation is that (a) people travel long trips they wouldn't have made if aviation wasn't around, and (b) the exhaust is put directly into the upper atmosphere. Driving from Toronto to Vancouver in a car would use more oil and create more greenhouse gas than flying that distance. A 777 at cruise uses about 8300 L/h with about 300 passengers. That is 27L/h per passenger. The cruising speed is about 900km/h which means 3.07L/100km per passenger. A typical mid-size car gets 7L/100km on the highway so only with 3 passengers on a highway does a car get greater fuel efficiency and 100km on the highway is not necessarily 100km as the bird flies.

 

[tkip]

Very interesting......

As a newbie to this topic I'm glad for the detailed feedback and opinions and this has prompted me to keep learning more about it but I have to say that something appears to gathering on the horizon and it's looking not to be too pleasant.

I have a huge number of co-workers (nurses mainly) who commute in from the 905 area. Some from insane distances. Barrie, Lindsy and Peterborough. Under normal circumstances I think most of them are nuts for doing this.

They work downtown Toronto.

But if the price of oil keeps going up and up and they're unable to find work closer to home, how exactly will they handle this? Relocate? Buy properly in the city and stay there for the work week? Who knows?

Some potentially disturbing but interesting times are coming if I had to hazard a guess. I know some of my co-workers who will absolutely refuse to believe that oil prices will continue to rise indefinitely or that the day will come when they look at their cars and realize they cannot afford this anymore.

And in the scenerio of not being able to switch to a rather inexpensive alternative for jet fuel besides the currently used oil (and biofuel seems to be a dead end here) then what does this ultimately say about the future of air travel and what happens to the tourism industry throughout the world?

 

[Earlscourt_Lad]

I would suggest reading a cross-section of opinion on peak oil, rather than just reading those who would have you believe the sky is falling.

I would give more credibility to these people if they did not sound like evangelicals espousing a new religion.

 

[Brandon716]

NAFTA needs to be renegotiated so that Canada can benefit from its oil reserves in Alberta, and really let the United States have any left over oil that is unused by Canada. At present, because of NAFTA, it works the other way around.

During this process, Canada needs to use the luxury of having such reserves to transfer away from an oil based energy economy into alternative fuels in a serious manner.

Sounds more simple than it would be, but it starts with NAFTA renegotiations.

 

[isittimetomoveyet]

I have wanted to respond to this post for a couple of days, so some random thoughts about what has been discussed from a business minded environmentalist:

1. The peak oil theory only relates to oil reserves that are easily accessible, and I believe oil that is of the sweet crude variety. This oil requires much less processing and refining than oil derived from bitumen, such as in the tar sands. So while some people will say we have hit peak oil, that means through conventional supplies. The oil sand alone hold (apparently) 1,750,000,000,000 barrels of oil. I believe that is on par with the massive (apparently) reserves in Saudi Arabia... although I believe no external geologists have been able to confirm this for several years.

2. Hubbert's theory also didn't account for the potentially massive and vast reservoirs of oil and natural gas deposits that are expected to exist in the high north. Now that climate change is opening up the north to some commercialization, there is expected to be a bonanza of discoveries that may push the peak oil date further. I am not certain if this type of scenario was included in the theory, does anyone else know?

3. I think what we are really going to see within the next decade is the explosion of solar pv and solar thermal technologies. They key to solar has always been price. The technology has existed for decades. That being said, within the last several years we have seen production ramp up, we have seen some large global players entering into the ring, and we have seen some significant dollars invested into r & d. When combined with the growing environmental benefits, we are starting to see a shift. For every doubling of worldwide installed capacity, solar costs tend to drop by 20%. 2821 MW are currently installed worldwide. California alone has incentives for approximately 3000 MW of solar pv by 2018, while Germany and Japan, and Spain (and even Ontario to an extent) keep plugging away each and every year. Solar pv really represents the limitless fuel. The numbers are staggering...I believe something to the effect of all the sunlight that hits the earth for one hour, would be enough to power the entire world for a year. Thats messed. Nonetheless, economists think that somewhere between 2012 - 2015 solar pv will become cost competitive with conventional technologies...and several years after that, they could become cheaper. This doesn't consider any breakthroughs or game changing technologies.

3. If I had to place my bets on some sort of energy carrier for the future, it would be hydrogen. Hydrogen fits in so well with solar technologies. There are many firms our there trying to devise efficient technologies that use sunlight to covert water directly into hydrogen in an efficient process. And perhaps there are firms out there devising ways to make electrolysis more efficient... in which case solar pv would work as well. Perhaps in some future, the Imperial Oil's and BP's of the world wont run 'gas stations' anymore... perhaps they become the manufacturers and distributors of home based energy generation technologies. It would probably never be as profitable as the oil business, but it could be something.

4. I think oil prices play a bigger factor than afranson states. I know that it shifts buying patterns and that high gas prices mean a lot more people shy away from purchasing gas guzzling cars and such. Whether it effects real usage or not... I am not sure. But I think the government needs to invest to give people real alternatives.

 

[afransen]

I have wanted to respond to this post for a couple of days, so some random thoughts about what has been discussed from a business minded environmentalist:

1. The peak oil theory only relates to oil reserves that are easily accessible, and I believe oil that is of the sweet crude variety. This oil requires much less processing and refining than oil derived from bitumen, such as in the tar sands. So while some people will say we have hit peak oil, that means through conventional supplies. The oil sand alone hold (apparently) 1,750,000,000,000 barrels of oil. I believe that is on par with the massive (apparently) reserves in Saudi Arabia... although I believe no external geologists have been able to confirm this for several years.

I've heard that only a portion of that will likely ever be economically recoverable. Beyond that, there is quite a lot of shale oil around the world. I'm not sure how it affects the 'theory', just timing of the peak.

2. Hubbert's theory also didn't account for the potentially massive and vast reservoirs of oil and natural gas deposits that are expected to exist in the high north. Now that climate change is opening up the north to some commercialization, there is expected to be a bonanza of discoveries that may push the peak oil date further. I am not certain if this type of scenario was included in the theory, does anyone else know?

Again, I'm not sure this changes anything beyond timing. I also got the impression that permafrost made oil and gas exploration easier... but, I'm no engineer.

Solar pv really represents the limitless fuel. The numbers are staggering...I believe something to the effect of all the sunlight that hits the earth for one hour, would be enough to power the entire world for a year. Thats messed. Nonetheless, economists think that somewhere between 2012 - 2015 solar pv will become cost competitive with conventional technologies...and several years after that, they could become cheaper. This doesn't consider any breakthroughs or game changing technologies.

I think it might take a bit longer than that, unless there is concerted governmental involvement.

3. If I had to place my bets on some sort of energy carrier for the future, it would be hydrogen. Hydrogen fits in so well with solar technologies. There are many firms our there trying to devise efficient technologies that use sunlight to covert water directly into hydrogen in an efficient process. And perhaps there are firms out there devising ways to make electrolysis more efficient... in which case solar pv would work as well. Perhaps in some future, the Imperial Oil's and BP's of the world wont run 'gas stations' anymore... perhaps they become the manufacturers and distributors of home based energy generation technologies. It would probably never be as profitable as the oil business, but it could be something.

Hydrogen will probably be used for some applications, but I have my doubts about it being used in transportation. More likely, I think, are 80/20% battery/biofuel hybrids, essentially using biofuel as a range extender for occasional long distance travel.

4. I think oil prices play a bigger factor than afranson states. I know that it shifts buying patterns and that high gas prices mean a lot more people shy away from purchasing gas guzzling cars and such.

I suspect much of this is more a function of media attention. Whether your $60,000 SUV takes $80 or $100 a week to fuel is a difference of only $5,000 over a 5 year timespan. For many people, that isn't going to pry them out of their tanks.