Transcript Chapter 2 Deteriorating Oil and Food Security

Chapter 2
Deteriorating Oil and
Food Security
Yen Ha & Jessica Hallenbeck
CORE: Human Population
Part I
Crude Oil
The Demand For Oil

Our society has become an oil-based
civilization



There has been an annual increase
of about 1% for the world’s demand
for oil




Cars, trains, planes
Urbanization: cities, suburbs
2005-2006= 0.77% increase
2006-2007= 1% increase
Third straight year that annual
growth is less than 2%
The world currently consumes 85.7
million barrels/day in 2007



The leading country: United States
1972- 1 bushel of wheat= 1 barrel
of oil
2007- 8 bushel of wheat= 1 barrel
http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption
Top 25 Countries of Oil Consumption
*
http://www.nationmaster.com/graph/ene_oi
l_con-energy-oil-consumption
Annual Growth Rate of Oil

United States


China


http://wolf.readinglitho.co.uk/mainpages/consumption.html
The huge increases in Asia and China over the last four
decades are very clear.
Unchanged
within the past
three years with
an average of
20.7 million
barrels/day
5.5% increased
from 2006-2007
Currently
consumes 7.7
million
barrels/day
Available Oil


Estimated 2 trillion barrels of oil are
available in the world
However, 1 trillion has already been
harvested



Easy oil: close to shores, near the surface,
large reservoirs
Tough oil: off shores, deep underground,
difficult to find
Energy Information Administration of the
U.S. Department of Energy estimates that
there still are 1.28 trillion barrels of oil
reserves available in the world
Available Oil Cont…

Cambridge Energy Research
Associates (CERA) have found in
2006 that there is an estimate of 3.74
trillion barrels of oil remaining in the
world
• This could raise questions of new
technologies, geopolitical conflicts, and
economics to find these new frontiers
http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=8444
Measuring the Decline of Oil
Computer Models
 Analysis of Reserves and Production
Relationship
 Separate the World’s Oil Production
Countries into 3 groups

Computer Models

Projects future oil production and
prices based on the past
http://www.eia.doe.gov/steo
http://www.eia.doe.gov/steo
Reserves and Production
Relationship


Look to see future production trends
M. King Hubbert (US Geological Survey) predicted the
production peak based on the time between new
discoveries
 Used the information that the US had new discoveries in
1930
 Estimated that the US oil production would peak in 1970
http://tonto.eia.doe.gov/dnav/pet/hist/mcrfpus1a.htm
Separating the World

Group 1: Falling production


Group 2: Rising production


United States, Venezuela, United
Kingdom, Norway
Russia, Canada, Kazakhstan, Algeria,
Angola, Brazil, Nigeria, Qatar, United
Arab Emirates, Libya
Group 3: Verge of a downfall in
production

Saudi Arabia, Mexico, China
Separating the World cont.
• The predictions for many of the
countries are true
•Countries that have already
peaked (US, Venezuela, UK,
Norway)
•BUT how about…
•Saudi Arabia, Mexico,China,
Libya
• For the most part, categorizing
these countries are inaccurate at
the true representation of their oil
production
http://www.worldoil.com/INFOCENTER/STATISTICS_DETAIL.AS
P?STATFILE=_WORLDOILPRODUCTION
Problems With Discovering
New Oil

95% of the oil in the world has already been discovered


Husseini (former head of exploration at Aramco) claimed that it’s impossible
to discover enough new oil reserves to compensate for all the oil demand




Currently, 2007 has produced 85.7 million barrels per day
18 of the top 20 oil reserves were discovered in the 1970’s


Need enough to cover the 2 million barrels/day increase of oil demand each year
Also need enough new oil to cover for the declining 4 million barrels/day from old
oil reserves
International Energy Agency (IEA) claims that the demands of 2007 (84.75
mbpd) cannot even reach the oil production of 2006 (85.01 mbpd)


Due to the lack of exploration and new discoveries suggests that oil companies are
agreeing to this fact
None of the new oil reserves found within the past decade made the top 20
However, if the CERA is correct in its claims about the 3.7 trillion of oil that
still remains means that we have NOT discovered most of the oil available on
this earth
Plus, the annual increase of oil consumption has not increased 2 million
barrels/day within the past 3 years
Hubbert’s Peak

Utilizes a bell-shaped curve to predict the oil
production for the future




Use the patterns seen from 1992-2006 to
predict for 2006-2020
1992: 67 million barrels/day
2006: 85 million barrels/day (18 mbpd
increase)
2020: 67 million barrels/day
• Would require a 21% drop within this 14 years
period
• Nevertheless, with an increase of 1% oil
consumption annually, we would need to produce
106 million barrels/day to meet the needs of
consumers
Critics of Hubbert’s Peak

Jerome R. Corsi:



Argues that we are constantly finding new oil
reserves so the idea of us completely
running dry of oil by 2050 is impossible
In September of 2006, ExxonMobil claimed
that oil in place estimates to about 6-8 trillion
barrels per day and 3 trillion barrels per day
in oil shale deposits
Others


The peak of 2006 is lower than the oil
production of 2008
Estimates of oil productions are expected to
increase within the next years
Actual Hubbert’s Peak
•Hubbert’s Peak falls short of
prediction
•2006 was not the peak of oil
production since production in
2008 has surpassed it
•This shifts the prediction curve
http://www.theoildrum.com/files/PU200808_Fig3b_0.png
Actual Hubbert’s Peak Cont.
http://www.eia.doe.gov/steo
Furthermore, the United States is estimated to increase its production within the
next two years according to Energy Information Administration
- This dramatic decrease in oil production after the peak of 2006 is yet to be seen
Other Options for Oil

The remaining 5% of the oil is in the Artic
 Which country controls which parts?
 Problems:
• Wars, environmental regulations, devastation to the
ecological systems

Tar sands—products of oil shale
 Canada has an estimate 1.8 tbpd but only 300 bbpd
can be recovered
 Venezuela has 1.2 tbpd but only 400 bbpd can be
recovered
 Problems:
• Extremely hazardous to the environment: heating, need
lots of natural gas, carbon-intensive
• 2 tons of sand= 1 barrel of oil
• Extremely costly: takes 2 barrels out of 3 barrels to pay
for the costs
Other Options Cont…

Oil Shale: conversion of kerogen, an
organic material, into oil and gas
Colorado, Wyoming, Utah
 Problems:

• Requires several barrels of water= one
barrel of oil
• Very costly, climate destruction, time
Problems with Declining Oil

High demand and low
supply


IEA estimates that by 2030,
we will need 120 million
barrels/day to meet our
consumer needs in the US
We do not change

Industries still continues to
make cars, airplanes, food,
ect. as if the oil will continue
to last
http://www.marktaw.com/culture_and_media/politics/GlobalOilImages/productionandconsumption.gif
Problems Cont…



Growth of modern cities
 400 cities, 20 mega cities with more than 10 million people
 Requires lots of oil for transportation, operation of large buildings,
new technologies, ect.
 Garbage—needs to go longer distances as the cities grow larger
which requires more oil and higher costs
Suburbs
 People need to commute to work
 Highly dependent in the US where most people still transport
using cars rather than public transits
 Shopping malls, Wal-Marts, roads
Bottom line
 INC in oil prices= INC in cost of food= INC in everything else
 Without oil, we will no longer be able to travel far distances, get
fresh produces, and have our luxurious lifestyles
Reality of Oil Consumption
http://maps.grida.no/go/graphic/world_oil_consumption
Part II
Food and Oil
Since 1950
Cheap Oil Boosts Food
Production
World grain harvest quadrupled last
century.
 1950-1972: 1 bushel of wheat =1 barrel of
oil on the world market = $2
 2007: 8 bushels of wheat = 1 barrel of oil

"What is driving oil prices so high?", BBC (November 5, 2007).
•When oil >$60, becomes cheaper to convert food
crops to oil
World Grain Harvest



1950: 630 million tons
Now: 2 billion tons
Productivity (with little new land) tripled due
to:



Tripling of Irrigation
10 times more fertilizer used
High yield crops
• Hybrid corn in US
• Dwarf wheat and rice in Asia
World farmland
According to satellite imagery, 15
million km2 of farmland in 2000.
 New farmland has been created, but
much farmland is lost to urbanization
and overuse.

Food prices are going up to
equal oil prices

2006: In US, 16%
food crops to oil


In 2008, 30% use
projected by Lester
Brown
2007: According to the
USDA projections the
share of ethanol in total
corn use will rise from
14% in 2005/06 to 31%
in 2016/17.
Image fromNew York Times Jan 19, 2008.
Grain Exporters/Importers
Image from Theoildrum.com
Food vs. Population

Grain
1984: 342
kilograms
grain/person
 2006: 302 kg/person
Why was there no
worldwide famine?


Soybean


1984: 68 million
tons
2007: 222 million
tons
US Agriculture Energy:
19% farm energy to pump water.
 2/3 of agriculture energy used by
transportation.
 7% of agriculture energy used in
packaging –more energy for packaging
than the food contains.

Refrigeration



Refrigeration uses
the most energy in
the food industry.
Energy Star models
use 50% less
energy than those
made before 1993.
Up to 4kWh per
day.
QuickTi me™ and a
T IFF (Uncompressed) decompressor
are needed to see thi s pi cture.
Image from wikipedia.com
The US has become more
energy efficient
Year
Gallons of Fuel
Gallons of Fuel per
Ton of Grain
1973
7.7 billion
33
2005
4.2 billion
12