1. Peak Oil Opportunities and Challenge at the end of Cheap Petroleum Richard Heinberg Scripps College September 18, 2006 The Challenge of Peak Oil The Challenge of Peak Oil Richard Heinberg Stroud Council May 31, 2007 Richard Heinberg Stroud Council May 31, 2007

3. Post Carbon Institute

5. UK

7. Chevron: “Oil production is in decline in 33 of the 48 largest oil producing countries, yet energy demand is increasing around the globe as economies grow and nations develop.” www.willyoujoinus.com

8. Global Oil Discoveries ExxonMobil 2003

9. Global crude oil production

10. All liquid fuels

11. Saudi Arabia production

12. Mexico Production

14. How serious a problem is this?

15. Peaking of World Oil Production: Impacts, Mitigation, & Risk Management Robert L. Hirsch, SAIC, Project Leader (commissioned by US Department of Energy, February 2005) EXECUTIVE SUMMARY The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.

16. GAO Report on Peak Oil Released April 2007; conclusions: Did not attempt a time estimate; forecasts of peak range from 2005 to 2030 The risks are serious and growing At best, the US can replace 4% of its liquid fuels with alternatives by 2015 Secretary of Energy should establish a federal Peak Oil strategy

17. What are the Alternatives? Liquids from Natural Gas (Fischer- Tropsch) Liquids from Coal Biofuels Hydrogen Electrified transport Conservation Post Carbon Institute

19. A second coal study… From “The Future of Coal” report to the European Commission from the Institute for Energy (in draft) “[T]he world could run out of economically recoverable … reserves of coal much earlier than widely anticipated.” “The amount of actual recoverable coal is … less than the widely published estimates of reserves.” “[C]oal might not be so abundant, widely available and reliable as an energy source in the future.”

21. World Energy

22. Sources that supply 93% of current world energy will all begin to decline during the next 25 years

23. Ethanol to the rescue? “ Even if all of the 300 million acres (500,000 square miles) of currently harvested U.S. cropland produced ethanol, it wouldn’t supply all of the gasoline and diesel fuel we now burn for transport, and it would supply only about half of the needs for the year 2025. And the effects on land and would be devastating.” --“The False Hope of Biofuels: For Energy and Environmental Reasons, Ethanol Will Never Replace Gasoline” (James Jordan and James Powell, Washington Post, July 2, 2006)

24. Hydrogen cars…when? Hydrogen is not an energy source There are significant storage problems Spending money on hydrogen research tends to take investment capital away from the development of primary renewable energy sources Electricity is a more practical carrier in most cases… especially with battery advances

25. A liquid fuels crisis? Because of impending supply constraints for natural gas and coal, “Peak Oil” is not just a liquid fuels crisis, but the beginning of an across-the-board energy crisis. This must inform our strategy: fuel switching will not help much, and attention must be paid to electricity supply. Post Carbon Institute

26. Evaluating energy options Energy return on investment Size of resource Infrastructure requirement Convenience of use Environmental impact Renewability Scalability Location of resource

27. Conservation: Efficiency and Curtailment Like alternative energy sources, conservation (efficiency) requires investment. Investments yield diminishing returns. However, at least in the initial stages, efficiency is almost always cheaper than new supply options. Curtailment is the cheapest option of all, but requires changes in habits and expectations.

28. Post Carbon Institute Areas for application of conservation strategies… Agriculture Transportation Space heating and cooling Urban design, permitting, zoning Tax and incentive policies Lighting Manufacturing

29. Transportation: Electrify it! Rail and light rail— the best long-term options for motorized land transport of freight and people… electric air transport as well?

32. Personal land transport The Velomobile 20-50 times as efficient as a Prius Electric assist

33. Post Carbon Institute What does “green” mean? In some ways, it makes sense to use carbon emissions as the measure of both the problem and potential solutions, since Carbon emissions are the primary driver of climate change, and Climate change is the worst environmental problem facing us.

34. What does “green” mean? However, exclusive use of the carbon emissions metric can be misleading: It ignores fuel supply problems It leads to false solutions like hydrogen, nuclear, corn ethanol, and “clean” coal There is no substitute for energy literacy!

35. Opportunities amidst Crisis Jobs helping individuals, businesses improve energy efficiency More labor needed in agriculture Opportunities for strategic investment in alternative energy industries, electric and public transport The end of cheap international transport means the renewal of local manufacturing Post Carbon Institute

36. What about global policy?

37. A promising strategy: the Oil Depletion Protocol Why focus on oil? The world’s primary energy source The basis of global energy trade (coal and natural gas are regional resources) The world’s foremost strategic resource: nations will go to war to control oil (they’ve done it before!)

38. Without a Protocol Price volatility will make planning and investment for the energy transition difficult Conflict over remaining oil reserves could engulf most of the world Lack of planning and preparation will leave societies vulnerable to economic collapse …rendering the world incapable of dealing with other problems, including climate change

39. The general direction We need an agreement to gradually reduce oil consumption in order to discourage competition, stabilize prices, and aid with planning and preparation The rate of reduction should be pegged to some objective datum so as to avert lengthy negotiations

40. The Oil Depletion Protocol: A Plan for a Sensible Energy Future Nations shall aim to reduce their oil consumption by at least the world depletion rate THE PROTOCOL

41. The Oil Depletion Protocol: A Plan for a Sensible Energy Future No nation shall produce oil above its National Depletion Rate No nation shall import oil above the World Depletion Rate THE PROTOCOL

42. The Oil Depletion Protocol: A Plan for a Sensible Energy Future WORLD DEPLETION RATE amount left to extract amount extracted annually The World Depletion Rate is currently 2.6%. This is the amount by which oil importing nations are required to reduce their yearly imports. Yet-to-produce = Remaining reserves + yet-to-find reserves

44. Municipal Efforts Kinsale, Ireland San Francisco, CA Bloomington, IN Sebastopol, CA Denver, CO Oakland, CA Plymouth, NH Portland, OR Tompkins County, NY Willits, CA

45. oildepletionprotocol.org postcarboncities.org postcarbon.org richardheinberg.com