1. Facing the end of fossil fuels

2. “Our ignorance is not so vast as our failure to use what we know.” M. King Hubbert

3.  17th century ◦ Archbishop Ussher – earth formed in 4004 BC  18 th century ◦ Count Buffon – 75 thousand years  19 th century ◦ Lord Kelvin – 98 million years  20 th century ◦ 4.5 billion years

4.  How long are we here for?  How much energy do we need?  How much energy do we have?  How quickly can we change?

5.  Energy consumption is growing at ½ the rate of long term economic growth  Global economic growth rate is ~4%  Global energy growth rate is 2%  Current global oil consumption rate is ~31GBbl/yr, 1GBbl every 12 days

6. 2035207021051858 to 2000 Total consumption doubles every 35 years Maintaining BAU will require 7 T BBL of oil this century 2T BBL 1T BBL 4T BBL

7. Reserves: 5.5 Trillion Bbl Requirement: 7 Trillion Bbl

8. Conventional Oil

9.  IEA undertook its first ground up analysis of energy production in 2008  Estimates for growth of oil production trimmed from 120 Mbpd to 105 Mbpd  IEA calls for investment of $28 Trillion to maintain growth

11.  "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.  "Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further.“ ◦ “Key oil figures were distorted by US pressure, says whistleblower” Nov. 9, 2009, guardian.co.uk

15.  “Traditional fossil fuel resources face serious supply constraints and an oil supply crunch is likely in the short-to-medium term with profound consequences for the way in which business functions today.” ◦ - Lloyds 360° Risk Insight

16.  “Christophe de Margerie, head of the French oil giant Total, flatly declared that the "optimistic case" for maximum daily output was 100 million barrels  Royal Dutch Shell's CEO, Jeroen van der Veer: "after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand."

17.  By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. ◦ The Joint Operating Environment (JOE) 2008 ◦ United States Joint Forces Command Center for Joint Futures

18. 1. Few large fields, many small fields 2. Increasing capital costs 3. Declining energy return on energy investment

19.  Over half of our oil production comes from 130 giant, aging oil fields  Remainder comes from about 4500 currently active fields  As giant fields decline they will have to be replaced by many smaller fields  Exploration rates and investment will have to increase

20. Sources: AAPG Memoirs, Oil and Gas Journal, Rigzone, RJ Research estimates and analysis Giant Oil Fields Reserve Adds Dropping Every Decade Since the 1960s

21.  At up to $100 million, deepwater wells cost 10 times more to develop than onshore wells  Nonconventional oil is even more expensive  Share of global capital allocated to oil will have to rise Oil ProvinceCapital Cost per bbl/day Saudi Conventional Wells$4,000 Saudi New Development$16,000 Kashgan Giant Field$93,000 Alberta Tar Sands$143,000

22. Conventional oil 20:1 Tar Sands 5:1

24.  Likely too late to start mitigation before peak  Rate of decline is unpredictable  Peak may be masked by economic recessions  Mitigation strategies will take decades to implement

25. Fossil Fuels 85%

26.  Vehicle efficiency ◦ Mpg standards could be doubled ◦ 20 year replacement time for auto fleet ◦ Efficiency offset by growth in car ownership  Efficiency potential is limited ◦ Engines at near practical limits ◦ Aerodynamics are largest problem ◦ Solution is small, lighter and slower

27.  Coal-to-Liquids/Gas-to-liquids ◦ Half of the energy content of coal consumed in the conversion process ◦ GHG emissions effectively double ◦ URC Coal reserves being revised downward ◦ Additional demand would reduce them faster

28.  “it is feasible to keep atmospheric CO2 from exceeding about 450 ppm by 2100, provided that emissions from coal and unconventional fossil fuels are constrained.  James E Hansen, “Implications of “peak oil” for atmospheric CO2 and climate”

29.  Peak oil will not prevent climate change ◦ But IPCC worst case emission scenarios may not be realistic

30.  We are exhausting our non-renewable energy resources to destroy our renewable resources  Within a century we will be left with neither  The rate at which we can adapt is likely to be slower than the rate of energy decline