Peak Oil is the Global Warming nightmare scenario

There is very little peer reviewed public information available and free on the internet in relation to Peak Oil. How valid the information that is available on Peak Oil is difficult to judge. To me the numbers look reasonable that sometime in the next 30 years production of conventional crude oil will start to decline. Whether it was last year, this year, next year, in ten or 30 years is impossible for me to judge. But the earlier it happens the more disastrous in relation to climate change the consequences will be.

The Peak Oil Theory refers to the production of conventional crude oil. It does not deal properly with the production of non-conventional crude oil from alternative sources like tar sands, oil shale and coal.

According to some of the proponents of the Peak Oil theory, conventional oil production has already peaked or will peak in the next couple of years. I am concerned about the accuracy of these predictions because of the restricted availability of data on reservoir depletion that can be verified from the oil industry and countries like Saudi Arabia. I would also feel more comfortable if there were free and publicly available peer reviewed articles on Peak Oil. For the same reason there is not the data available to refute the more dramatic predictions.

This does not mean that the Peak Oil theory is unimportant or not a valid way to look at trying to predict future oil production, we just need to have access to data that can be readily verified.

The basic premise of Peak Oil is based on the time scales between the start of production, peak production, and the rate of decline during reservoir depletion which are well understood principles in petroleum engineering. How accurate the forecasts are as to when the peak occurs as predicted by Peak Oil is difficult to judge. Considering the length of time since the discovery of new oil reserves outstripped the voume of oil produced it is hard to imagine that oil production can keep increasing indefinitely. The problem is in the detail because of the number of oil reservoirs currently in production.

If we had no alternative to the production of conventional crude oil then running out of conventional oil would be a good thing when thinking about climate change. However alternatives are available and they are already being exploited.

The reason Canada pulled out of trying to meet its committments in relation to the Kyoto treaty was because their production of heavy oil from the Alberta tar sands remove any chance that they can keep to their comittments. Production at the end of 2006 from the Canadian tar sands was about 1 million barrels of oil per day.

To put the volumes of the different oil reserves in perspective, there are 1.2 trillion barrels of recoverable conventional crude oil, about 0.8 trillion barrels of recoverable oil from the Colorado oil shales, and about 175 billion barrels of crude oil are economically recoverable from the Canadian tar sands at a price of USD$35 per barrel. The current price of crude oil per barrel has been almost twice that for the last couple of years suggesting that the volume of economically recoverable reserves is significantly larger than 175 billion barrels. The total volume of bitumen in the tar sands is about 1.7 trillion barrels. The size of the Orinoco tar sands resource in Venezuela is similar in size to the Canadian tar sands. However, the development of the Venezuelan tar sand resource is well behind that in Canada.

Coal liquefaction, whereby you produce oil from coal, is also possible. About a third of South Africa's oil requirements are supplied by coal liquefaction. This adds yet more reserves. China has recently signed an agreement with South Africa to license their technology for the production of oil from coal. Coal liquefaction adds another huge amount to the reserve available for the production of non-conventional crude oil and it is now clear that plans are in place for ramping up the production of oil from coal.

In other words the remaining known world oil reserves are huge, it is just that they are not conventional. These huge reserves do not change the essential argument of Peak Oil. It is likely that there will be physical constraints on the rates at which oil can be produced from these non-conventional sources, and this is especially so in the near term. The rate at which production of oil from these reserves can increase in the near future is not likely to match the decline in production from conventional oil fields once the decline has started. Production of non-conventional oil will help to mitigate some of the effects due to the decline in conventional oil production, but the carbon dioxide emissions of all these non-conventional sources are significantly greater.

For example it requires the energy from 1 barrel of oil to produce about 30 barrels of oil from a conventional reservoir. In comparison the energy from 1 barrel of oil will produce between 1.5 and 3 barrels of oil from the Canadian tar sands after all the processes including extraction and the conversion of bitumen to oil. The numbers are similar for producing oil from both oil shales and coal liquefaction.

The Canadians have been considering building a nuclear power station in Alberta near to where the bitumen is extracted from the tar sands to supply some of this energy, but even this will still not change the essential point that the non-conventional crude requires more energy to extract the conventional oil that it replaces: Carbon dioxide emissions as a result of using non conventional crude oil are much higher than emissions from using conventional crude for the same consumption.

One last conventional oil alternative is ethanol from corn. I bring this up for a few reasons. Brazil converts sugar-cane into ethanol, however this requires a fairly low energy input which means that net carbon dioxide emissions are lower than those for petrol. The same is not true when converting corn into ethanol, when considering the full process including all the inputs required for growing the corn like oil-based fertilizer. The net carbon dioxide emissions are similar to or possibly even higher than for petrol from oil. In this case net carbon dioxide emissions are the emissions produced minus the amount of carbon dioxide removed from the atmosphere when the corn or sugar-cane is growing. George Bush's energy proposals in early 2007 had little to do with reducing carbon dioxide emissions and more to do with trying to look like he was doing something about energy security and looking after the corn growers of the American mid-west.

The use of ethanol from corn instead of petrol from oil will not reduce carbon dioxide emissions. The increase in demand for corn as a result of using it to produce ethanol will increase the price of corn. Corn has more than doubled in price in the last year and as a result there have been protests in Mexico because corn is a dietary staple for many of Mexico's poor. If the rich want to use corn to make ethanol so that they can drive their cars they can push the price up so far that it will be too expensive for the poor to buy for food. The end result is the price of all cereals including wheat and oats will be pushed higher.

I can see nothing about "Peak Oil" that is good with respect to climate change. We can see already that the Canadian government has chosen to back its oil industry by pulling out of its Kyoto agreement. The faster the decline in the production of conventional oil, the higher the price of a barrel of oil will rise, driving the investment into the production of non-conventional oil. We will have less oil, it will be more expensive and we will be emitting more carbon dioxide than ever before.

A change of government in Canada will not change this dynamic: the Canadian oil industry will use its financial clout to make sure that whichever party is in power, their interests will be looked after. The decline in the production of conventional oil will be partially offset by the increase in production of non-conventional crude oil with significantly higher carbon dioxide emissions for every barrel of oil consumed.

Some environmentalists seem to feel that Peak Oil might be their saviour and when arguing with a skeptic about climate change will often switch to "Peak Oil" as an angle to try the skeptic that they need to change their behaviour. When the skeptics then hear about the size of the non-conventional crude oil reserves they will just think that all we need to do is spend money investing in the technologies to ramp up production of non-conventional crude.

The financial markets often behave in a herd like way and by pushing Peak Oil rather than climate change as the problem we will add to this herd like behaviour and push the price of oil up higher than it might otherwise be. This means bigger profits for oil companies, increased investment in non-conventional oil production, and a large increase in the volume of economically recoverable reserves.

The environmental arguments can and should be won on their own merits.

If we reach the peak in Peak Oil before we have significantly de-carbonedized our economies, then many governments around the world will ignore the implications of climate change to meet the immediate problems of a collapsing economy and the massive unemployment that will result from the rapid rise in oil prices. They will do whatever is required to increase the level of oil production needed to minimize the economic damage.

We need to start switching to a low carbon economy now. We need to do this because of climate change. Having it forced on us because of Peak Oil is most likely only going to result in an even faster rise in the emissions of carbon dioxide.