Peak Oil – The Implications Ceiliuradh 2009 Clifford Guest Tipperary Institute

Content Peak Oil ◦ What is it? ◦ What is the evidence? ◦ When will it happen? Key Implications Energy Implications for Ireland Four Scenarios Conclusions

What is Peak Oil? "The term Peak Oil refers to the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion." Dr Colin Campbell

Peak Oil follows a bell curve, but demand only increases

What is the Evidence for Peak Oil? 1. The Hubbert peak 2. Peak discovery 3. No giant oil fields being found 4. Energy return on energy invested 5. More expensive to produce oil 6. Lack of spare capacity 7. Big oil fields are the oldest

What is the Evidence for Peak Oil? 1. The Hubbert peak 2. Peak discovery 3. No giant oil fields being found 4. Energy return on energy invested 5. More expensive to produce oil 6. Lack of spare capacity 7. Big oil fields are the oldest

What is the Evidence for Peak Oil? 1. The Hubbert peak 2. Peak discovery 3. No giant oil fields being found 4. Energy return on energy invested 5. More expensive to produce oil 6. Lack of spare capacity 7. Big oil fields are the oldest

9 North Sea Classic Pattern Peak to Peak = 26 years Denmark Norway & UK

10 World Discovery peaked in 1964 Past discovery by ExxonMobil 1981 Smoothed with 3-yr moving average

What is the Evidence for Peak Oil? 1. The Hubbert peak 2. Peak discovery 3. No giant oil fields being found found 4. Energy return on energy invested 5. More expensive to produce oil 6. Lack of spare capacity 7. Big oil fields are the oldest

What is the Evidence for Peak Oil? 1. The Hubbert peak 2. Peak discovery 3. No giant oil fields being found 4. Energy return on energy invested 5. More expensive to produce oil 6. Big oil fields are the oldest 7. Lack of spare capacity

What is the Evidence for Peak Oil? 1. The Hubbert peak 2. Peak discovery 3. No giant oil fields being found 4. Energy return on energy invested 5. More expensive to produce oil 6. Big oil fields are the oldest 7. Lack of spare capacity

What is the Evidence for Peak Oil? 1. The Hubbert peak 2. Peak discovery 3. No giant oil fields being found 4. Energy return on energy invested 5. More expensive to produce oil 6. Big oil fields are the oldest 7. Lack of spare capacity

What is the Evidence for Peak Oil? 1. The Hubbert peak 2. Peak discovery 3. No giant oil fields being found 4. Energy return on energy invested 5. More expensive to produce oil 6. Big oil fields are the oldest 7. Lack of spare capacity Adapted from “The Oil Age is Over”, Matt Savinar

When Will it Happen ? Significant variance in views The only reliable way to identify the timing of peak oil will be in retrospect

When Will it Happen ? Recent study by UK Energy Research Centre (Oct, 2009) ◦ Independent group ◦ Academic attempt to reconcile the polarised debate on the timing of peak oil ◦ A review of over 500 studies, analysis of industry databases and comparison of global supply forecasts

Reserves Growth

Peak Oil – When? UKERC Report; “A global peak is likely before 2030 and there is a significant risk of a peak before 2020” Richard Heinburg: ◦ July 11, 2008 – Peak Oil Day ◦ High of $147/barrel ◦ Record 74.8 million barrels of oil per day

Peak Oil – When ? IEA Energy Outlook 2008 ◦ Decline rate of conventional oil now 6.7% IEA Energy Outlook 2007 ◦ Decline rate of conventional oil 3.7%

In an Interview with George Monbiot – 15 December 2008 “In terms of the global picture, assuming that OPEC will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau as well, which is of course not good news from a global oil supply point of view.” Dr Fatih Birol, Chief Economist, International Energy Agency

Peak Oil – Implication #1 The end of exponential growth, fuelled by cheap fossil fuel;  The Economy  Production  Consumption  The Population  Food Supply

“ The greatest shortcoming of the human race is our inability to understand the exponential function ” Dr. Albert Bartlett Professor of Physics, lectures on Arithmetic, Population, and Energy

So have we reached the end of economic growth ? (as conventionally defined)

Crude Oil $ rd October, 2009

Peak Oil Implications – The Hirch Report Previous transitions were gradual and evolutionary; oil peaking will be abrupt and revolutionary The real problem is liquid fuels for transportation - motor vehicles, aircraft, trains, and ships have no ready alternative Mitigation efforts will require substantial time - an intense effort over decades

Peak Oil Implications – The Hirch Report It is a matter of risk management - early mitigation will be less damaging than delayed mitigation Government intervention will be required - otherwise the economic and social implications would be chaotic More information is needed - effective action requires better understanding of a number of issues

Energy Implications for Ireland

Baseline Total Primary Energy Requirement Source: SEI (2008)

White Paper Total Energy Requirement Oil still at 55% of energy make up in 2020 in White Paper scenario Source: SEI (2008)

Energy Implications for Ireland Need more ambitious targets for sustainable energy and delivery on the targets that we have Using oil for heat and electricity generation needs to be phased out as soon as possible Transportation sector needs to be electrified Return to local & regional power production

Future Scenarios – D Holmgren (2009) Available at;

Future Scenarios "... the characterisation of the four scenarios is difficult and inevitably SPECULATIVE, they do PROVIDE A FRAMEWORK for considering how Peak Oil and Climate Change could interact to reshape global and local energy resources, settlement patterns, economy and governance.“ D. Holmgren

Fast Oil DeclineSlow Oil Decline Destructive G Warming Holmgren, (2009) Brown TechLifeboats Earth StewardGreen Tech Benign Global Warming

Reasons to be Cheerful! Our growth economy and culture of constant change is a strength as we face an uncertain future There is evidence of effective (while challenging) transition away from cheap oil elsewhere i.e. Cuba The harshest impacts of climate change may not effect Ireland

Reasons to be Cheerful - Ireland! Small population Productive agricultural land Island nation Excellent; wind//bioenergy/wave/ solar resources Intact social networks Well educated Rural base

Conclusions Peak oil follows a bell curve but demand only increases Large resources available but unlikely to be accessed quickly and make a difference to a global peak Uncertain timing but convincing evidence that it will be before 2020 Halt to exponential growth model in the world economy Less an energy issue than a lifestyle one Can be seen as an opportunity to return to sustainable societies

Finally……………

Thank You For Your Time and Attention Thank You For Your Time and Attention Clifford Guest