Special Report: Peak Oil

Waste More Want More

In the wake of the highly predictable, not-even-slightly-surprising BP Gulf disaster, we can ask the news media to dust off energy demand management and recycle root-and-branch energy savings from its present "don't talk about that one" status.

By Andrew McKillop
Published June 11, 2010

Consumers in the debt-stressed, anguished "mature democracies" fed with rosy propaganda about their sophisticated and supposed postindustrial status - but avidly consuming every conceivable industrial gadget and gimmick - never have the time to ask the simple question they should ask.

Exactly why are murky, environment crunching energy and natural resource corporations like BP, Exxon Mobil, Sinopec, Suncor, Xstrata, Barrick Gold, Norilsk or Rio Tinto working at the edge of technology and at the edge of continents?

Exactly why do they gouge out and grapple massive quantities of basic resources kilometres below the earth's surface, and far beyond the edge of sane risk limits?

The answer is simple: for the consumers.

When or if they vote with their pocketbooks and stop buying oil, coal, gas, electricity, aluminum doors for their camper wagon, or plastic mops to clean up after the party - and nitty gritty basics such as food, clothing and medication - they can play innocent and decry Corporate Evil.

Until then, they have to accept that flat earth innocence - and dependence on the round earth's real and rarefying resources - is hypocrisy cocktail and will not mix.

Trying that game is as pointless as BP's CEO Tony Hayward bleating he wants his life back.

Use More Waste More

Why was BP drilling in 1.5 kilometres of water ? Why does a quarter of the USA's national oil production come from deep water?

Sarah Palin already has the answer: because cynical despots in the OPEC states and Russia practice resource nationalism. That prevents big energy corporations like BP from coming in and depleting their onshore national oil reserves in record time. Also because misguided and malevolent environmentalists take a pleasure in preventing exploration in US Arctic nature reserves. As Palin knows, oil is wildly abundant in nature reserves.

Under any hypothesis, any theory, there can be no depletion and no shrinkage of the resource base. Whenever the resource is depleted, it is replaced, as Walt Disney or Steven Spielberg (when he isn't dealing with Bernie Madoff) will explain. Big oil corporations drill in fantastic water depths, and as we now are told take a lot of risks doing so, only for technological kudos, to be active and virile, to be bigger and better.

This has nothing to do with the stuff getting rare because of rising demand outstripping supply of non-renewable geological resources. Thinking that could be the cause is so politically incorrect it is out of the question.

To be sure, the press and media will soon tell us nuclear power is cleaner and safer than deep offshore oil, and Canada's tarsand oil could or might be less risky than edge-of-continent high-tech oil production a couple miles below the water surface, where water pressures are several tons per square inch.

Green And Clean

Alternatively, we can play clean and green, with lurid scenarios of 'unthinkable' nuclear accidents, and flashbacks to the sad strip-mining of tens of thousands of square kilometres of Canada's forest land in the quest to extract tarsand goo, to help us make the choice.

This sales pitch is nice, but it only works for a short while. Results are disappointing, and soon afterwards the same media will show us photo shots of gaunt but efficient, low polluting, giant deep offshore rigs - reliably producing oil for all of us in the setting sun. Until the next catastrophe.

This is an endless cycle, to some, but underlines we live in the world Nassim Taleb describes, shaped by Black Swan events that nobody predicted, until after they happened. Black swans swarm when we endlessly raise the stakes by scooping out the low hanging fruit resources. Risk has to rise as the growth game lumbers forward like a giant bulldozer with a leaking tank.

When the risks reach certain thresholds, driven by endless growth in our resource consumption, the catastrophes and disasters become commonplace. It becomes possible - if still not politically correct - to predict them before they happen.

The politically and media correct White Swan fantasy world of the growing economy rigorously bans black-colored swans. This fantasy version of the resource gulping global consumer economy has only White Swans, clean beaches, filling stations with tanks full to the brim, and happy polar bears which gambol on solid ice.

We are told this White Swan world of 2017 or 2027 or 2037 will be almost the same as today - except a lot more so. This is what you should believe, but the only safe bet is that even 2017 will be radically different in ways we can pretend we can't imagine, but in private have no problem imagining, and fearing, right now and today.

The so-called alternate ecological view is now media friendly, allowed into politics and corporate living, but only has one real role: "crisis management". The shop-til-you-drop syndrome is recognized and feared, so the consumer herd must be managed. Short term adjust the consumer herd to austerity, develop their "ecological conscience", tone down their mindless greed a short while and hope the Global Economy can be brought back on stream, full power.

Despite the ominous signs to the contrary.

This alternate ecology delay tactic is strictly for crisis times, shown by the brittle, schizophrenic and incoherent slogan pack broadcast at the increasingly frayed consumer herd almost round the clock, with a Buy Green, Save Energy, Ride A Bicycle bottom line. This adds up to a no alternative message: Consume less but buy more - what could be more rational and more "ecological"?

Brown, Real and Dirty

In fact and reality we have one-only, basically 19th Century model, called urban industrial. It was first built on coal, iron and steel, and today we use over 6 billion tons of coal and 1.25 billion tons of iron and steel every year. Growth is the only goal.

The coal growth goal was not at all replaced - but added to - by the oil and natural gas growth goals. This fossil energy monster then grew 18-fold in 100 years, and nobody had the time to think about what happens afterwards.

At present our dependence is so total it isn't possible to ask if it's rational or ecological to depend on three non-renewable fossil fuels. It isn't possible to suggest we cut, and cut our dependence on fossil energy, whether from under-the-seas or overseas. We can't see that the more we use, the more we lose - pushing us into the hole of no choice but to grapple more where we can.

BP's Gulf of Mexico disaster is a role model: only when disaster strikes is the consumer press and media filled with proof we totally depend on cheap - or at least available - energy from high-risk, high-tech foraging in the bowels of the earth, to extract oil at 250°C.

To produce more, we risk more and we waste more.

Only at such times do we get the message clear and straight: to produce more, we risk more and we waste more.

Doing without any one of the three fossil fuels, if we could imagine it, would probably cause a quarter or more of the world's current population to die off or die back in a few years. Total economic collapse would be sure and certain. In fact the chances of the sequels being extreme and bad are as high as Tony Hayward of BP not getting his life back, and deciding to bow out before he gets kicked out.

No Alternative

When the game gets rough, the coal goal, oil goal and gas goal society can and does play very rough: because there is no alternative. Desperate needs generate desperate solutions, violent of course. The politics and economics that went - and go - along with relentless industrial and urban expansion cover every sombre extreme ever known by humanity.

That is slavery, colonial capitalism, genocide, revolutionary marxism, national fascism and nazism, totalitarian communism - and the No Hope no-politics of cynical and fragile neoliberalism whipped up in the wake of the 1970s Oil Shocks.

It's always bad to have No Alternative.

Today, like Tony Hayward, we have no alternative. The mutant and rampant Global Supermarket industrial and urban growth model is pedal-to-the-metal. This aberrant, toxic, cancerous model of society and civilization runs on any and all fossil fuels, gulps huge quantities of non-renewable metals and minerals from anywhere they can be extracted, and lumbers on.

Anywhere on earth where large tracts of natural forest remain, as in Indonesia these are inevitably under attack. Why? To fee the global growth economy.

The latest, crisis management version bolts-on green energy vanity projects, to amuse or befuddle the consumer mass, force fed with ecological propaganda when buying their next car or computer. We can fear that like its 19thC parent, no tinkering or reform will change it - only collapse or revolution naturally terminates this model.

The process is usually preceded by or ends in war, often starts with financial crises like the present, and has outlier civil wars like those of the Middle East and Afghanistan.

Waste It and Want It

The short fuse to the next Oil Shock is smoldering. Carefully hidden by the media until now, tarsand oil production and deep offshore oil production are the dirtiest of all, but in total produce only 4% or 5% of world total oil supply. Their potential for warding off the vampire of scarcity is low. Both of these post-crisis and pre-collapse oil supply sources leak and lose the most, consume the most energy and resources for their own production, or otherwise destroy the biggest percent of their "nameplate capacity".

Carefully ignored by the media in Old World consumer countries, big energy corporations have for years raised production of coal, and now natural gas and uranium, much faster than oil. With ever rising losses, also. Reasons for this explain the media blackout, because real waste clashes with glitzy images of high-tech leading edge industry.

Dirty coal powers industrial China and industrializing India, and provides a lot more electric power in Europe than windmills. Nearly two thirds of world electricity now comes from coal power stations: Google geeks and iPhone idiots can babble Green Eco Friendly slogans, but they run 65% on coal, even when their mouths are open 100% of the time.

Strip-mined coal, like strip-mined uranium ores, or strip-mined tarsand oil in Canada guarantee environmental devastation - as well as cheap electricity, iron and steel, cellphones, computers and cars - for the urban consumer mass. This is the reality, and without coal, like we said above, total economic collapse would be certain. Ditto for oil, but perhaps only near total collapse without natural gas.

Using less can start right now, in homes offices and factories, trimming the consumption rate and cutting the loss rate: call it energy conservation and efficiency raising. An old song, dating from at least 35 years back in time.

Stretch The Resource and Buy Time

The new and windfall reserves of cheap natural gas can be stretched. Produced through shale gas reservoir fracturing using solvent chemicals, sand and water, similar to the alternate 'in situ' method for producing tarsand oil, the new supplies depend on constant drilling and are from environment friendly.

None other than soon-to-quit BP CEO Tony Hayward, renowned for truth telling, estimates shale gas reserves as equivalent to "a hundred years" of world gas supply.

Drilling in several countries but primarily the USA is now frenzied, also because gas reserves - once found - deplete at typical rates above 40% a year and incur very large production loss rates.

Massive spending on raising LNG supplies using vast, dangerous and expensive cryogenic supertankers also leads to the same result: huge loss rates of methane gas, at the industry standard rate of 1% of any shipment, every day the ship moves, or stands by awaiting the green light to discharge its load.

The natural gas windfall can go to stretching oil, as T Boone Pickens says, using gas-powered car and truck fleets, instead of hoping for technology miracles with electric cars and their batteries. Big uranium tracks the same no-alternative curve to bigger risk, more environment damage and more wasted output, to feed the consumer herd with cheap electricity.

In fact and reality, nuclear power is a small size, expensive and dangerous cousin of coal fired electricity, but the hunt for cheap uranium is forcing a production shift to open pit strip-mined ventures, the lowest wage the better. Cutting corners on safety, this spreads radiological dust and debris to the four winds and into the lungs of low paid mining labor in Niger, Namibia, Kazakhstan and their low-cost producer rivals outside the developed countries.

The answer, you guessed, is the same: cut electric power demand, renouncing the all-day all-night lighting of offices in city centres. Call the whole process Demand Side Management (DSM) if that sounds a nicer thing than using less.

Far away, the consumer herd will always claim its entitled to not know about reality. As ever, public ignorance is bliss, except when it concerns corporate crime - as Obama now calls BP's edge-of-continent high-tech oil gamble that went wrong.

In the wake of this highly predictable, not-even-slightly-surprising-disaster, we can ask the news media to dust off DSM and recycle root-and branch energy saving from its present "don't talk about that one" status.

Andrew McKillop is a writer and consultant on oil and energy economics. Since 1975 he has worked in energy, economic and scientific organizations in Europe, Asia, the Middle East, and North America. These include the Canada Science Council, the ILO, European Commission, Organization of Arab Petroleum Exporting Countries, the UN Economic and Social Commission for Asia and South Pacific, and the World Bank. He is a founding member of the Asian chapter of the International Association of Energy Economics. He is also the editor, with Sheila Newman, of The Final Energy Crisis (Pluto Press, 2005).

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By Pxtl (registered) - website | Posted June 11, 2010 at 09:37:20

I'll never understand the green objection to nuclear power. I mean, I undestand it (nuclear waste disposal, issues in the mining industries) but it seems impractically idealistic. Either global warming is an urgent enough problem that we should be encouraging the development of nuclear power as a stopgap measure, or it isn't.

Basically, the alternative is to tell every citizen that we should just accept having to switch to an energy use model that would be unthinkable a few years ago. To switch to models that have not been tested long-term and may not be ready to provide for our energy needs on large scale. Nuclear power is a realistic goal.

Don't let the best be the enemy of the good.

Comment edited by Pxtl on 2010-06-11 08:38:20

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By jasonaallen (registered) - website | Posted June 11, 2010 at 10:32:56

The reality is, that there is no solution that will 'replace' the energy of the fossil fuels we now burn. The only alternative - which is admittedly totally heretical in the 'endless progress' myth of modern society, is to make do with less. Much like the human race did for the 30,000 or so years we were here before people started burning coal. In other words it's probably pointless to run around looking for 'alternatives' unless it's to smooth out our descent towards a wind/solar/muscle powered society.
Also, I have to disagree with Andrew's implication that the coal/oil is going to dry up suddenly (although I suspect it was more for effect). There's plenty in the ground to get out, it's just going to get much more expensive to use it. As Kiely elequently pointed out in response to one of my earlier articles - peak oil isn't going to mean sudden societal collapse, it's going to instead involve societal and technological responses to the challenge of depleting oil supplies.

Not that it's all going to be sunshine and rainbows, but if we begin to make good decisions now (at the individual, but more importantly family and neighborhood level - civic is ok too, but at the provincial and federal level it's probably pointless) - hopefully we can mititgate some of the bumps on the way down from our energy 'high'.

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By grassroots are the way forward (registered) | Posted June 11, 2010 at 15:11:38

I have been following the Gulf of Mexico disaster, I read many articles, watched videos. It is horrible to say the least.

I was watching one video in which the talk was around the whole Green Industries, which is more of the same really, as everything is still based on an oil economy.

Oil drives the military and we are seeing, have seen and will see the destruction and death that it causes.

The power of corporations, the lack of government intervention, the whole corrupt based system we live in.

Sorry people but this is just the start.

It is all about money and power, the people, the creatures of the sea are nothing, they have no value.

Dont you know, corporations have more rights then people.

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By nobrainer (registered) | Posted June 11, 2010 at 15:30:19

Grassroots did you read the article? The author's point is that oil companies keep drilling in dangerous places because people keep pouring more oil into there cars.

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By grassroots are the way forward (registered) | Posted June 11, 2010 at 15:54:48

Yes I read the article but I felt that he missed some very relevent points.

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By moylek (registered) - website | Posted June 11, 2010 at 16:11:26

Oil's not the precise enemy. Before we had oil, we choked our air with coal smoke. And armies fought brutal and rapacious wars before either oil or coal. We could stop using oil and still manage to do incalculable damage to one another, ourselves and our world.

That doesn't mean that I think that we're doomed to burn and destroy forever and ever, amen. We have degrees of civilization, education, literacy, technology, awareness and organization which our forebears had not and I believe that we can change our trajectory. We've improved society before and we can do it again.

We can learn from the successes of the past: how to do with less waste, less travel, fewer things, more self-reliance, more efficiency. And we can strive to avoid the mistakes of the past: the short-sighted exploitation of resources, the blind faith in technology, the knee-jerk rejection of tradition, the willingness to consider the good of only our own family/tribe/race/nation.

Specifically, we need to ... uhm ... well. Bike more? Plant a garden? Telling people to stop blowing each other up, please?

Well, that's where it gets trickier, isn't it? Is there an expert we could ask?

Comment edited by moylek on 2010-06-11 15:14:40

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By WRCU2 (registered) - website | Posted June 14, 2010 at 08:06:57

Lucky me says the minimalist, who tasks, is there an expert we could ask: What then precisely is our enemy's mask?

Comment edited by WRCU2 on 2010-06-14 07:10:07

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By Kiely (registered) | Posted June 14, 2010 at 13:59:05

Kiely elequently pointed out in response to one of my earlier articles - peak oil isn't going to mean sudden societal collapse, it's going to instead involve societal and technological responses to the challenge of depleting oil supplies. - jasonallen

Thanks for the props Jason. I should point out that I am a bit of a "kool-aid drinker" when it comes to some of the technologies needed. I look forward to (and expect) the day that I will charge my 400 Km range electric vehicle and provide the bulk of my household electrical needs using solar panels on the roof of my house and garage and perhaps a small wind turbine mounted in the backyard.

I believe in the potential of urban off the grid living, (or at least close).

On another topic (and warning I'm going a little conspiracy theory here) I have been to open pit strip mines. I've seen the largest coal mines in Indonesia and Colombia (two of the world's largest). When I go to these places I get a strange feeling. The equipment keeps getting bigger. Bigger shovels, bigger trucks. The production demand is always high and going higher. Some may say this is just the "race to the bottom" economy or the way these corporations work in order to maximize profits. But I get the feeling it isn't so much of a race to the bottom as it is a race to get everything out of the ground before there is no market for it (i.e., a race to extract all profit before the market hits bottom). With other commodities with a seemingly infinite shelf life (e.g., gold, copper, etc...) there is a throttling of production in relationship to commodity price. This doesn't seem to be the case with fossil fuels, (outside OPEC's occasional attempt to control price). Production trends upwards with very little if any relationship to price being detectable.

What will replace coal, gas, oil, etc??? I really don't know, but I'm often left with the feeling someone does.

Call me crazy, but I won't be surprised if (when the right time comes) there is an "Edison moment" that will "miraculously" change everything and enable all these currently just of reach technologies to be viable. I also won't be surprised if BP, Chevron or Suncor own the rights.

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By Michelle Martin (registered) - website | Posted June 14, 2010 at 17:53:09

It's important to remember that oil isn't only a fuel source. Read this in the Globe today.

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By Kiely (registered) | Posted June 15, 2010 at 14:06:13

It's important to remember that oil isn't only a fuel source. Read this in the Globe today. - Michelle Martin

No doubt Michelle, but plastic was a convenient use for low demand by-products of the oil refining process (e.g., propylene) and we can find replacement materials for most things currently made of plastic... or maybe just stop making some of the crap all together. Eliminating plastic would only be a good thing.

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By zookeeper (registered) | Posted June 15, 2010 at 14:19:46

It's not just plastic. Try running a modern farm without pesticides (source: petroleum) or fertilizer (source: petroleum).

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By Undustrial (registered) - website | Posted June 15, 2010 at 17:24:20

I suppose, zookeeper, that depends on your definition of a "modern farm". I know lots of people who do so, and in fact it's one of the only areas in which any small farms are doing well. People ran farms without petrochemicals for almost ten thousand years, and the economics of financing petrochemical-based farm inputs (tractors, fertilizers, pesticides etc) is one of the main forces driving people out of farming today, as well as destroying they land they're trying to farm.

As for a "sudden collapse" - if what happened last year doesn't scare you, I don't know what will. The system is far too complex to take the kind of shocks which peak oil is coausing. Thankfully oil itself won't run out overnight, as it's liquid (or tar), and both coal and uranium, solids, will take even longer. This isn't to say their supply is safe - both coal and uranium hit the same fundamental hurdle as oil - only areas of high concentration are worth mining, otherwise it takes more money and energy than we'll ever get back. Many estimates put global coal with only decades left, and uranium lasting less than a decade if the world attempted to use it to meet all of our electricity needs.

Natural gas, on the other hand, could very easily run out before we realised what was going on, especially with the boom in use, price and extraction created by the recent oil shocks. And people being forced to park their cars sucks, people not being able to heat their homes can kill them.

Moylek is right on the money - this isn't about oil. This is about using resources unsustainably. Oil lends itself pretty well to unsustainable use, but the Middle East had been desertified by stone and iron-age technologies (irrigation, logging etc) long before anybody knew what that smelly black stuff was.

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By Kiely (registered) | Posted June 16, 2010 at 08:49:52

Many estimates put global coal with only decades left - Undustrial

Carbones del Cerrejon and Kaltim Prima Coal, two of the world's largest coal mines, have an estimated 20-25 years left. 2030 is often sited as the year of "peak coal".

BTW, great post Undustrial.

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By Ryan (registered) - website | Posted June 16, 2010 at 09:43:41

And of course, the faster we transition to liquids-from-coal, the faster the coal depletion curve will play out. Richard Heinberg pointed out in an RTH interview that coal reserves are routinely overestimated.

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