Special Report: Peak Oil

Bridging the Gap: Alternatives to Petroleum (Peak Oil, Part II)

Oil's three unique properties, combined with its sheer abundance, mean it's unlikely any alternative, or combination of alternatives, can replace oil and allow our economy to continue its current course indefinitely.

By Ryan McGreal
Published July 01, 2005

Raise the Hammer has written about energy issues rather extensively in our hammerblog, as well as writing reviews and conducting interviews (see the bottom of Part I for a list of links). As we wind up the hottest June on record, it seems a good time to take stock of the issue in a more coordinated manner.

This is Part 2 of a three part series on oil peak production and its implications for Hamilton's future development. Part 1 provided an overview of the "peak oil" theory; Part 2 explores the unique properties of oil and the limitations of possible replacements; and Part 3 will examine what cities can do to plan and prepare for the future.

Unique Properties of Oil

How important is oil? Unlike any other energy commodity, oil is concentrated, versatile, and portable.

Concentrated

For a sense of how concentrated the energy in oil is, consider that I can drive my compact car six kilometres on the oil that would fill a pop can. Other fuels don't pack the same punch, and renewables are orders of magnitude less energy dense.

It's theoretically possible to build enough nuclear reactors to convert our fleet of millions of cars from oil to electric, but electric cars don't have nearly the speed or range as gas cars, and hydrogen for fuel cells has far too many problems to power a practical, large-scale car infrastructure. The infrastructure would be prohibitively expensive to build, and hydrogen is extremely light, flammable, and corrosive, making it difficult to store or transport, and highly prone to leaks and explosions.

Versatile

Petroleum is also incredibly versatile. It powers everything from golf carts to jumbo jets. It's used to make the roads on which we drive our petroleum-powered vehicles. It's used to make all manner of plastics, which make their way into just about everything we buy, a variety of solvents and dry-cleaning fluids (an oxymoron?), lubricating oils and greases, naphtha, and paraffin wax.

It's also used to fertilize the soil to grow our food. A single acre of farmland consumes 19 litres (enough fuel to drive 342 kilometres in my car) of petroleum in fertilizer each year. The so-called Green Revolution of the 1960s, when farm yields tripled, was not a victory for improving the productivity of the land. If you measure productivity by energy invested, modern farms are actually quite a lot less efficient than their non-petroleum-enhanced forebears were.

This doesn't take into account the fuel burned by tilling, sowing, and ploughing machines, aerial crop dusters, or transport trucks that take the crops to factories to be processed. Translated into food, it takes ten calories of fossil fuel energy to produce one calorie of processed food (for beef, the ratio jumps to 35:1). After that, the processed food still has to be trucked to the grocery store, often across the continent.

Portable

Oil is fungible, which means oil from anywhere can be interchanged with oil from anywhere else. As the oil supply from a given well declines, it can be replaced with oil from another well, and the global supply is an aggregate of all the individual supplies from the world's active wells.

Oil is extremely easy to move around. It stores in liquid form at room temperature and can therefore be poured into tanks on trucks, train cars, or ships and carried anywhere in the world. It can also travel thousands of kilometres through pipes. It can sit nicely in a tank under a fueling station, or in the gas tank of a car. It is more or less inert, meaning it doesn't react chemically with the materials (metal tanks, plastic and rubber gaskets) used to house it.

Alternatives

Oil's three unique properties, combined with its sheer abundance, mean it's unlikely any alternative, or combination of alternatives, can replace oil and allow our economy to continue its current course indefinitely.

Natural Gas

In contrast to oil, natural gas must be super-cooled until it becomes a liquid and stored in special containers that keep it cold. After it is shipped across water, liquid natural gas (LNG) must be converted back to gas form in expensive regasification plants before it can be piped to its destination.

Domestic natural gas production has already peaked in the United States, which means more will have to be transported there from offshore and from other continents. The infrastructure to do this hasn't been built yet, but will cost many billions of dollars over the next couple of decades, and lead to tremendous battles between developers who want to build regasification plants in coastal towns and local residents who won't want to host them.

The United States accounts for a quarter of the world's natural gas consumption, using it mainly to generate electricity (every power plant built in America in the past two decades has been gas-fired) and heat buildings. LNG currently accounts for two percent of U.S. consumption, but will make ups 15-20 percent by 2025.

Between now and 2010, America will have to prepare for a 58 percent increase in LNG imports to 23 billion cubic metres. 2010 is also the year that Canadian natural gas peaks, meaning America will have to make up the shortfall with NG from Mexico and LNG from offshore sources.

There are currently 40 proposals to build regasification terminals in Canada, the United States, Mexico, and the Bahamas, nearly all of which will feed the American market for natural gas. Eight of those proposals are in Canada, and while most are intended to re-export their NG to the U.S., domestic production will no longer be able to meet Canada's demand after the production peak.

Hydrogen

Hydrogen has so many problems related to portability that it will probably never be used widely. First of all, hydrogen is a way to store energy, not a source of energy. Converting energy to hydrogen is a net loss, meaning one unit of energy produces less than one unit of hydrogen energy.

This would be acceptable if hydrogen was a convenient storage medium, but it's not. Hydrogen molecules are the tiniest of all elements, and can escape from nearly any container. It is also highly reactive and corrodes the gaskets that contain it. Furthermore, hydrogen is extremely explosive and can combust at most concentrations with oxygen; merely the energy released by hydrogen escaping a leak in its tank is enough to cause explosive combustion.

Further, the most common and effective means of producing hydrogen is via natural gas, which is already declining in North America and tied up in other uses.

Electricity

Hydrogen fuel cells are an attempt to overcome the limitations of electric motors. Electrical generators operate at between 30 percent and 60 percent efficiency, so power is lost as soon as it is converted to electricity. Electric power also encounters resistance as it moves through wires; some of its potential is lost through heat.

Further, because electricity cannot be "stored" in tanks, it must be generated as needed. During low demand times, generating stations idle at low efficiency; during peak demand times, less efficient generators are brought on-line, producing power at low efficiency.

Electric cars can store energy in batteries, but the batteries are expensive, have a short life, cannot store very much power, and are not very efficient.

Nuclear

The public's current disdain for nuclear power and its attendant risks probably won't survive a sustained energy crisis. However, the best nuclear power plants can do is replace natural gas power plants for generating electricity. Since natural gas is already declining in North America and imports are much more expensive, nuclear reactors will be busy enough simply maintaining current energy production levels, let alone increasing net energy.

This also neglects to consider the massive investment of petroleum needed to provide nuclear power, for mining and extraction, construction of the facilities, etc. As James Howard Kunstler explains, nuclear power is an adjunct of the petroleum age; it cannot survive far past the end of abundant oil.

Non-Conventional Oil

Media commentators have made much of the huge quantities of oil in Alberta's oil sands. Officially, Canada has the world's highest oil reserves. Unfortunately, the sands will probably never be a major contributor to world oil markets.

Oil sands require massive inputs of natural gas to heat water into steam, which is injected into the sands to separate the oil. Natural gas itself will provide a limit to how much oil the sands can provide, because its use will be increasingly constrained in years to come.

Even if you ignore the staggering volumes of oily wastewater, tar sands production has a low energy return on energy invested (EROEI). After the non-conventional oil is retrieved, it must still be enriched with hydrogen before it can be used in place of conventional oil. All told, the EROEI is about 3/2. It's unlikely that this ratio will be increased much beyond 2/1.

Similarly with "shale oil" (which is not really oil but kerogen, which yields oil when heated), it requires massive investments of energy to extract and refine the shale into oil.

As energy investment banker Matthew Simmons explains of oil sands and shale oil, "They're real and the economics work, but these are high energy intensity projects that can never reach high volumes. They are not a substitute for high flow rate oil. They are not a real offset."

Organic Fuels

Organic fuels like biodiesel and grain ethanol are simply not viable options for large-scale energy consumption. For those enthusiasts willing to collect spent vegetable oil from fast food restaurants, bio-diesel can supply a few niche needs at most.

Similarly, running a country's fleet of cars on grain fuel would require the conversion of far too much farmland to growing feed crops. This doesn't even take into account the fact that modern farming is fueled by petroleum. Growing fuel represents a net energy drain.

Renewables

Renewable energy from wind, solar, geothermal, and tidal sources cannot replace oil in any imaginable scenario.

They simply cannot produce anything even remotely like enough energy to run the trappings of modern life. Since most renewables are location-dependent, they cannot provide the portability of oil; at best, they could help feed a distributed electricity grid, with the attendant limitations this entails.

At 1.5 megawatts (mW) per turbine, for example, it would take over 1,300 wind turbines to replace one 2,000 mW gas fired power plant. That could conceivably be used to power some electric cars, but it's never going to push an airplane into the sky.

Further, renewables tend to be highly variable in the power the produce. Solar panels work best on sunny days; wind turbines work best on windy days, and so on.

Post-Oil Economy

As a result, an economy running on some combination of alternative and renewable energy sources will be radically different from today's economy. Part Three of this series will explore some possible scenarios for a post-oil economy. Rather than dwelling on the worst case (for that, read James Howard Kunstler's book The Long Emergency, I will focus on opportunities to turn the end of cheap oil to our advantage in creating more humane cities.

More Quotes

More and more energy insiders, investors, and analysts are alerting us to the likelihood of oil peak production. Here's a sampling of recent statements.

The majors, they talk about plenty of oil and that they can produce more, but if you look at ExxonMobil, ChevronTexaco, BP (British Petroleum), all the production [is] going down every year. They don't replace and they don't add to production, but they say there's plenty of oil around.

Now why would they say that? One of the chief economists with one of the major oil companies... I was at a conference where he was... we were talking and I asked, why do they say that? And he said, can you imagine what would happen if one of these major oil company's CEO's got up and made a speech and he said, 'We're running out of oil'? I said there'd be panic and he said, 'That's right. They're not going to make the statement. They're going to say there's plenty of oil around. - T. Boone Pickens, famed energy investor
Kuwait's geologists must have had a pretty good year [in 1985, the year OPEC began to allot exports based on a country's reserves], because their reserves climbed from 64 billion barrels to 92 billion. But the Kuwaitis were pikers compared to their brethren in the Emirates, who said that, upon reflection, they needed to boost their reserves from 31 billion to 92 billion. Not to be outdone, Iran announced its real reserves were 93 billion, up just a tad from a previous 47 billion. The 1985 champ, though, was the savvy Saddam, who was not content with double digits: his reserves went to 100 billion, up slightly from the previous 47 billion.
-- Don Coxe, Chairman, Jones Heward Investments Inc.
We've been down a long road of exploration and exploitation and found everything easy. We've reached the point where all the major initial discoveries have reached their peaks and are declining. The newer ones are too small to offset it, and North American natural gas production has clearly peaked and is irreversibly declining. We think were at that turning point for world oil. From now on we're in a new era where the key question is what prices will be required to cause consumption to decline to match an irreversible decline in supply?
-- Henry Groppe, founder, Groppe, Long & Littell

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal.

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By ryan (registered) - website | Posted None at

For a more detailed look at nuclear power, see the following article: http://www.raisethehammer.org/blog.asp?i...

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By dylanh (registered) | Posted None at

You are too quick to write off Biodiesel as a viable alternative to the use of oil as an energy-source for our transportation energy (which is about 2/3 of our oil consumption here in America). While you are right that it is impractical to convert enough farmland into crops for biodiesel, it IS practical to process biodiesel from oil produced by genetically-engineered algae. For more info check out this website at Univ of New Hampshire: http://www.unh.edu/p2/biodiesel/article_...

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By Fossil (anonymous) | Posted None at

Regarding 'genetically-engineered algae' for a real life horror story and hint of things that may come... see: http://www.bbc.co.uk/science/horizon/2000/killeralgae.shtml I suppose some really think that the answer to all our problems would be a heavy dose of genetic pollution wrapped in assurances from Monsanto. Keep in mind that most genetic engineering schemes are built around squeezing more corporate profits out of a crop by pumping in low cost oil. They "displace" small local farmers -- into the growing slums. The bottom lines of corporations do not include 'external' environmental or human costs, but they have great marketing. Bio fuels can only exacerbate environmental problems and human starvation -- currently 5000 dying per hour 24/7. That's 1.6 World Trade Towers every hour of every day, day after day. Mostly children. But "they" don't count. Some folks just want to have 'fun' in their metal wombs (softly, safely carried, blissfully protected from the elements and other nasty aspects of reality) -- irregardless of who they hurt or what they destroy. Locked into a paradox, their lifestyle requires driving, which undermines their lifestyle, and life itself. We can't drive away from Peak Oil. Perhaps we should start breeding horses... but even horses used 1/4 of all the agricultural production in pre-oil days (organic). Of course, people back then had far less population pressure for arable land -- and in many areas they still had good, healthy, non-eroded topsoil. Those days are long gone. We are due for an oil hangover, a worldwide crash of civilization -- famines, disease, violence, discomfort... and ultimately, few, if any, survivors. And those 'lucky' few who might survive will live in ways comparable to our recent pre-oil ancestors, but not nearly as easily, or as well, on a barren, polluted, depleted, planet. I guess all we can say now to the hope of future generations is "Good luck. Hey, at least WE had a good time."

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By CarpeVeritas (anonymous) | Posted June 07, 2008 at 21:13:05

Fossil, your facts seem a little scewed. according to the World Health Organization
Organisation, Department of Measurement and Health Information, the approximate worldwide death rate due to all forms of malnutrition was 2,132 per 100,000 (2002 data). That makes your 24/7 starvation figure grossly overstated.
Furthermore, your blaming the petroleum industry for global starvation has no basis in fact or true relevancy to this issue. Without the rapid response capabilty allowed by petroleum fueled planes, trains, and ships and trucks, global mortality rates due to most all causes would be nearly as high as they were 100 years ago.

The chief concern here is how the governments will react in their awkward attempts to create an orderly transition to life with higher petroleum prices. Taxes in the US are over 3 times the net profit rates the retailer sees.

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By freefuelforever (anonymous) | Posted June 22, 2008 at 11:40:56

Oh, it is not all so bad.

Not many people listened to us selling clean alternative energy when the oil was cheap. Only when the price went up did we start to get the calls for our solar alternatives.

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By CameronM (registered) | Posted March 13, 2009 at 06:00:01

Energy consumption is rising as the population and demand increases. As a result, the price of fuels in the industries is also at its peak. To solve this problem, people seek new alternatives to sustain their needs for energy. Tequila, for example, has been discovered as a potent source of energy. Tequila is often given blame in stories of drunken debauchery, as are many other beverages of its sort. However, the spirit distilled from the agave may start to become somewhat of a rarer commodity. Researchers are looking closely at Agave, which has been proven as a potent yield crop for biofuel. A recent study from Australia points out that it has almost twice the potential as most other biofuel crops. A lot of people would be willing to give a cash advance or two for an alternate fuel source, as General Motors has revealed their plans for biofuel vehicles to be released in the land under. This may turn out a good story attributed to tequila.

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By confused (anonymous) | Posted June 17, 2010 at 18:37:48

What do you do if you are the average person, simply wanting to begin the process of weaning off petroleum. Obviously driving less would be good, but I'm originally from the Gulf (now in Canada) and I think it's almost impossible to ask people in the southeast to NOT drive as there is no reliable public transit, or viable biking options, few bike lanes or sidewalks. What can the average person begin doing/saying to those around us that will influence a social change?

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