Transcript About Time - Climate change

Facing the end of fossil fuels
“Our ignorance is not so vast
as our failure to use what we
know.”
M. King Hubbert

17th century
◦ Archbishop Ussher – earth formed in 4004 BC

18th century
◦ Count Buffon – 75 thousand years

19th century
◦ Lord Kelvin – 98 million years

20th century
◦ 4.5 billion years

How long are we here for?

How much energy do we need?

How much energy do we have?

How quickly can we change?

Energy consumption is growing at ½ the rate
of long term economic growth

Global economic growth rate is ~4%

Global energy growth rate is 2%

Current global oil consumption rate is
~31GBbl/yr, 1GBbl every 12 days
4T BBL
Total
consumption
doubles every 35
years
Maintaining
BAU will require
7 T BBL of oil
this century
2T BBL
1T BBL
1T BBL
1858 to 2000
2035
2070
2105
Reserves: 5.5 Trillion Bbl
Requirement: 7 Trillion Bbl
Conventional Oil

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IEA undertook its first ground up analysis of
energy production in 2008
Estimates for growth of oil production
trimmed from 120 Mbpd to 105 Mbpd
IEA calls for investment of $28 Trillion to
maintain growth


"The 120m figure always was nonsense but even
today's number is much higher than can be
justified and the IEA knows this.
"Many inside the organisation believe that
maintaining oil supplies at even 90m to 95m
barrels a day would be impossible but there are
fears that panic could spread on the financial
markets if the figures were brought down further.“
◦ “Key oil figures were distorted by US pressure, says whistleblower”
Nov. 9, 2009, guardian.co.uk

“Traditional fossil fuel resources face serious
supply constraints and an oil supply crunch is
likely in the short-to-medium term with
profound consequences for the way in which
business functions today.”
◦ - Lloyds 360° Risk Insight


“Christophe de Margerie, head of the French oil
giant Total, flatly declared that the "optimistic case"
for maximum daily output was 100 million barrels
Royal Dutch Shell's CEO, Jeroen van der Veer: "after
2015 supplies of easy-to-access oil and gas will no
longer keep up with demand."

By 2012, surplus oil production capacity could
entirely disappear, and as early as 2015, the
shortfall in output could reach nearly 10 MBD.
◦ The Joint Operating Environment (JOE) 2008
◦ United States Joint Forces Command Center for Joint Futures
1.
2.
3.
Few large fields, many small fields
Increasing capital costs
Declining energy return on energy
investment

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Over half of our oil production comes from
130 giant, aging oil fields
Remainder comes from about 4500 currently
active fields
As giant fields decline they will have to be
replaced by many smaller fields
Exploration rates and investment will have to
increase
Giant Oil Fields Reserve Adds Dropping Every Decade Since the 1960s
Sources: AAPG Memoirs, Oil and Gas Journal, Rigzone, RJ Research estimates and analysis

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At up to $100 million, deepwater wells cost
10 times more to develop than onshore wells
Nonconventional oil is even more expensive
Oil Province
Saudi Conventional Wells
$4,000
Saudi New Development
$16,000
Kashgan Giant Field
$93,000
Alberta Tar Sands

Capital Cost per bbl/day
$143,000
Share of global capital allocated to oil will
have to rise
• Conventional oil 20:1
• Tar Sands 5:1

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Likely too late to start mitigation before peak
Rate of decline is unpredictable
Peak may be masked by economic recessions
Mitigation strategies will take decades to
implement
Fossil Fuels
85%

Vehicle efficiency
◦ Mpg standards could be doubled
◦ 20 year replacement time for auto fleet
◦ Efficiency offset by growth in car ownership

Efficiency potential is limited
◦ Engines at near practical limits
◦ Aerodynamics are largest problem
◦ Solution is small, lighter and slower

Coal-to-Liquids/Gas-to-liquids
◦ Half of the energy content of coal consumed in the
conversion process
◦ GHG emissions effectively double
◦ URC Coal reserves being revised downward
◦ Additional demand would reduce them faster

“it is feasible to keep atmospheric CO2 from
exceeding about 450 ppm by 2100, provided
that emissions from coal and unconventional
fossil fuels are constrained.

James E Hansen, “Implications of “peak oil” for atmospheric CO2 and climate”

Peak oil will not prevent climate change
◦ But IPCC worst case emission scenarios may not be
realistic
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We are exhausting our non-renewable energy
resources to destroy our renewable resources
Within a century we will be left with neither
The rate at which we can adapt is likely to be
slower than the rate of energy decline