Abandon 19th Century Fuels and Move Toward 21st Century Responses
Posted Aug 26, 2008 by Debbie Cook
Mayor, U.S. Congressional candidate, and Post Carbon Institute Board member Debbie Cook tackles U.S. discourse on energy
America lost 10 years of potential technological innovation to Europe and Asia arguing about whether Climate Change was man-made or not. As a result we lost our edge in the world, we increased our energy vulnerability, and we seem to have learned nothing from it. We are now arguing over whether drilling the last thimble full of oil is going to keep us rolling merrily along.
Every American needs to understand that the world has now experienced three years of flat oil production and during those three years, another 230 million energy consumers were added to the population of the world. It is obvious to any observer that oil production, for whatever reason, whether geologic or geopolitical in nature, is not going to keep up with demand. Fifty-four of the 65 oil-producing nations have entered irreversible production declines. This is a matter of fact, not opinion. We can either continue to debate and watch opportunities pass us by or develop a sustainable future that reduces world tensions and our energy vulnerability.
Just because oil is found on American soil, does not make it American oil. Unless America is preparing to nationalize its resources, that oil will belong to an oil company. And that oil will go into a world market that we do not control—a market that is subject to the whims of OPEC, terrorists in Nigeria, Russian bullying, China roaring, and our own wasteful energy habits.
Many of the claims made by politicians and pundits can be tested against the Energy Information Agency’s database. How many times have we heard that American oil technologies would turn around the sagging oil production of nationalized oil fields in Mexico, Brazil, and Venezuela. If these technologies are so wonderful, how do you explain US production figures. After the US peaked in 1970 there was a huge spurt in drilling activity as evidenced by the gold line in the following chart:
The bump up in the mid-1980s was not a result of this enormous increase in drilling activity but rather the addition of oil from Prudhoe Bay. Even Prudhoe Bay was unable to make up for the thousands of declining fields in the Lower 48 states. Today Prudhoe Bay is one fifth of its peak production and the US’ relentless declining production trend has not been changed by new technology. Similar results can be seen in the North Sea where production peaked in 1999 and is now at one fourth its peak. Today the UK is just one more oil importing nation.
Another oft-repeated argument is that higher prices will bring on new oil. That kind of economic argument may work with widgets but not with finite resources. What we are seeing however, is a sharp spike in the costs of US drilling as we tap into deeper, more hostile, and more inaccessible areas as depicted by the red line. Costs for extraction in terms of personnel, rigs, and infrastructure are rising and energy return on investment is declining. Our exploitation of oil is an example of the "best first principle" whereby humans always use the highest quality, lowest cost resource before moving to the lower quality, higher cost resource.
To the extent that OPEC has spare capacity, it will continue to control the price of oil (opening and closing the valves to match a price that suits its needs, not ours). We must also be cognizant of the fact that it is oil exports that we rely upon. As OPEC’s population grows, so will the call on its own oil. History and models have shown that the top five oil exporting nations will be exporting nothing within 25 years. To the extent that we can leave oil before it leaves us, we can control our destiny. To the extent that we are unable or unwilling to change our behavior, we will be at the mercy of others.
The truth is that our economy was built on abundant cheap fossil fuels whose subsidized price encouraged waste and rapid consumption. As energy quality and quantity declines, it will have enormous effects on net economic growth, the cost of government, our ability to pay back debt, and whether we can fund pensions, healthcare, and important public services. We are all subject to natures’ laws and principles and no amount of arguing can change that fact. We can continue to waste precious time hanging on to 19th century fuels or we can move rapidly and consistently toward 21st century responses.
This article is cross posted on The Hill.