THE COMING GLOBAL CRISIS...
What Happens If... When We Run Out Of Oil?
Envision a world where freezing, starving people burn everything combustible — everything from forests (releasing CO2; destroying topsoil and species); to garbage dumps (releasing dioxins, PCBs, and heavy metals); to people (by waging nuclear, biological, chemical, and conventional war). This is a world where there is not enough renewable energy to create electricity that keeps us warm or medicines many of us depend on just to live, a world where there are no meat processing plants and cold storages to keep food frozen so that we don't go hungry, and a world where there is no deisel fuel to transport consumer goods to market. Did you know this is a very likely possibility of what the future holds for us and that scientists are debating these issues right now? Do you know how close we really are to this bleak contrast of our lives today? Can you see your future now?
Economic students are taught that banks "create" money every time they make a loan, and that the economy is powered by money instead of energy. The juxtaposition of these two data (the first is true, the second is false) leads even Nobel Prize-winning economists to conclude they have discovered a perpetual-motion machine! No person has had a greater influence on the thinking of experts who have become government regulators of the world's oil and gas industries than economist Morris Adelman: "There are plenty of fossil fuels and no limit to potential electrical capacity. It is all a matter of money".
But Adelman — and every government regulator he has ever influenced — is wrong. It is a matter of energy! (The only source of energy in money is the medium itself, and a $100 bill contains no more energy than a $10 bill.)
Although economists treat energy just like any other resource, it is not like any other resource. Available energy is the prerequisite for all other resources. Moreover, universal energy laws tell us that the economist's perpetual-motion machine is impossible. To lift 15 kg of oil 5 meters out of the ground requires 735 joules of energy just to overcome gravity — and the higher the lift, the greater the energy requirements. The most concentrated and most accessible oil is produced first; thereafter, more and more energy is required to find and produce oil. At some point, more energy is spent finding and producing oil than the energy recovered. Thus, Adelman is wrong: it is not all a matter of money.
Neither capital nor labor nor technology can "create" energy (the first law of thermodynamics). Instead, available energy must be spent to transform existing matter (e.g. oil), or to divert an existing energy flow (e.g., wind) into more available energy. The engines that actually do the work in our economy (so-called "heat engines"; e.g., diesel engines) waste 50 percent of the energy contained in their fuel (the second law). Thus, Adelman is wrong again: there is a physical limit to potential electrical capacity.
Nearly everyone in the world (all governments, and all but a handful of scientists, etc.) has accepted the economists' perpetual-motion machine. Even the Energy Information Administration (EIA) of the US Department of Energy has no idea how much energy is required to produce energy ("net energy"). Nor does the EIA have any idea how fast energy can be produced ("peak")! But even a child can understand that machines do not run on money — they run on energy (daddy's car needs gas) — and available energy is a prerequisite for producing more energy.
Published petroleum experts Colin Campbell, Jean Laherrère, Brian Fleay, and Roger Blanchard all expect production of conventional oil to peak around 2005 and fall thereafter. Moreover, the CEOs of Agip (Italian oil company) and Arco have both published estimates of peak in 2005. So it seems like a reliable estimate. Campbell and Blanchard say that Norwegian production (the second largest export) is at "peak" now and will soon begin a long-term decline. Colombia and Venezuela are apparently well past their peaks and now in long-term decline. Mexico will probably peak this year at the midpoint of depletion.
The latest estimates by country can be found here: HTML — PDF — XLS
Gas production is better described as a "plateau" followed by a "cliff" due to the high mobility and recovery of gas. Whereas oil declines slowly as it moves through the porespace of the rocks under declining pressure, the decline of gas is a cliff — not a slope. The gas market gives no warning of the cliff because it is no more expensive to produce the last cubic foot than the first.
US gas production is at or near its "cliff" now. Canada currently makes up about 13% of the U.S. gas supply — and Canada may already be past its cliff in natural gas production. Canadians export most gas to the US under short-term contracts. Moreover, a vague law allows them to rein in the petroleum trade whenever it appears to be in their interest (and making the US pay dearly was in their interest in the late 70s). http://www.qv3.com/policypete/policypete.htm
Campbell says that it is not practical to make up the US gas shortfall by shipping it in from the Middle East. However, the construction of a new gas line to Alaska and the Canadian arctic where there probably are large untapped deposits could temporarily mitigate the US gas cliff.
The Alberta Energy and Utilities Board estimates that production from Canada's oil sands will be extremely slow (100 to 200 years for all of it). It is also worth noting that the processing of heavy oil and bitumen in Canada has used cheap, stranded gas. This gas is probably not going to be stranded or cheap much longer, which will reduce the economics of the heavy oil and bitumen extraction.
US coal is expected to become an energy "sink" — not worth digging out of the ground — by 2040.
Laherrère has provided a new paper that shows that there is no evidence from all the worldwide research and extensive coring for any massive hydrate deposits. http://dieoff.com/page192.htm
The rising energy costs (increasing extraction effort) and rising economic costs of oil set up a positive feedback loop: since oil is used directly or indirectly in everything, as the costs of oil increase, the costs of everything else increase too — including other forms of energy. For example, oil provides about 50% of the fuel used in coal extraction.
H.T. Odum's eMergy calculations show that the only other forms of energy that can survive the exhaustion of fossil fuel are biomass (burning wood, animal dung, or peat), hydroelectric, geothermal in volcanic areas, and some wind electrical generation. Nuclear power could be viable if one could overcome the shortage of fuel. No other alternatives (e.g., photovoltaics) produce a large enough net eMergy to be worth pursuing.
The sudden — and surprising — end of the fossil fuel age will stun almost everyone — and may kill billions. Once the majority of earth's people realize the truth about severe permanent reductions in the supply of gas and oil (it's just a matter of time), your life will change forever.





