The International Steam Pages
Preparing for a world with less oil....
The following is reprinted from Newsletter No. 51 – March 2005, by The Association for the Study of Peak Oil and Gas “ASPO”. See also the review and comment from Thomas W. Blasingame afterwards.
504. The US Department of Energy addresses Peak Oil
The Mitigation of the Peaking of World Oil Production
A recently completed study for the U. S. Department of Energy analyzed viable technologies to mitigate oil shortages associated with the peaking of world oil production.1 Commercial or near commercial options include improved vehicle fuel efficiency, enhanced conventional oil recovery, and the production of substitute fuels. While research and development on other options could be important, their commercial success is by no means assured, and none offer near-term solutions.
Improved fuel efficiency in the world’s transportation sector will be a critical element in the long term reduction of liquid fuel consumption; however, the scale of effort required will inherently take time and be very expensive. For example, the U. S. has a fleet of over 200 million automobiles, vans, pick-ups and SUVs. Replacement of just half with higher efficiency models will require at least 15 years at a cost of over two trillion dollars for the U. S. alone. Similar conclusions generally apply worldwide.
Commercial and near-commercial options for mitigating the decline of conventional oil production include: 1) Enhanced Oil Recovery (EOR), which can help moderate oil production declines from older conventional oil fields; 2) Heavy oil/oil sands, a large resource of lower grade oils, now produced primarily in Canada and Venezuela; 3) Coal liquefaction, an established technique for producing clean substitute fuels from the world’s abundant coal reserves; and 4) Clean substitute fuels produced from remote natural gas.
For the foreseeable future, electricity-producing technologies, i.e., nuclear and solar energy, cannot substitute for liquid fuels in most transportation applications. Someday, electric cars may be practical, but decades will be required before they achieve significant market penetration and impact world oil consumption. And no one has yet defined viable options for powering heavy trucks or airplanes with electricity.
To explore how these technologies might contribute, three alternative mitigation scenarios were analyzed: One where action is initiated when peaking occurs, a second where action is assumed to start 10 years before peaking, and a third where action is assumed to start 20 years before peaking.
Estimates of the possible contributions of each mitigation option were developed, based on crash program implementation. Crash programs represent the fastest possible implementation – the best case. In practical terms, real-world action is certain to be slower.
Analysis of the simultaneous implementation of all of the options showed than an impact of roughly 25 million barrels per day might be possible 15 years after initiation. Because conventional oil production decline will start at the time of peaking, crash program mitigation inherently cannot avert massive shortages unless it is initiated well in advance of peaking. Specifically
Without timely mitigation, world supply/demand balance will be achieved through massive demand destruction (shortages), accompanied by huge oil price increases, both of which would create a long period of significant economic hardship worldwide.
Other important observations revealed by the analysis included the following:
Oil peaking discussions should focus primarily on prudent risk management, and secondarily on forecasting the timing of oil peaking, which will always be inexact. Mitigation initiated earlier than required might turn out to be premature, if peaking is slow in coming. If peaking is imminent, failure to act will be extremely damaging worldwide.
World oil peaking represents a problem like none other. The political, economic, and social stakes are enormous. Prudent risk management demands urgent attention and early action.
References: 1 Hirsch, R. L., Bezdek, R. H., Wendling, R. M. Peaking of World Oil Production: Impacts, Mitigation and Risk Management. DOE NETL. February 2005.
Review and comment:
The above report has serious implications for the United States. In this country, every lawn mower, every farm tractor, every car, bus and truck, every motor boat, every airplane and every locomotive is totally dependent on petroleum based fuel. Any loss of refining capability, or any disruption in the supply of crude oil, would create shortages that would bring all agriculture, mining and transportation to a complete halt. In effect, we would be back in an Amish society.
Each week, the major railroads originate over 750 coal unit trains from the Powder River Basin in Montana and Wyoming. These coal trains supply over 55% of the electric generating plants in the United States. Even though the coal costs only 25% the cost of Diesel fuel, these trains are pulled by Diesel-electric locomotives that require expensive Diesel fuel. Without Diesel fuel, these trains would not turn a wheel. It is ironic that the only viable alternate fuel, coal, is totally dependent on the strategically vulnerable primary fuel for its production, transportation and distribution.
The above analysis addresses the problems of converting the automobile fleet to alternate liquid fuels, and states that no one has defined viable options for powering heavy trucks or airplanes with electricity. The railroad industry, which currently consumes about one-third of the nation’s petroleum-based transportation fuels, has a track record of over one hundred and fifty years in which the coal-fired steam locomotive hauled over 85% of this nation’s freight. With the technologies that exist today, solid fueled steam-electric locomotives could replace Diesel-electrics and substantially reduce the impact of the liquid fuel shortages that appear certain. The solid fuel option is totally ignored in this report.
For the past fifteen years, our company has been engaged in a project to design and develop locomotives that can operate cleanly, coolly and efficiently on fuels other than oil. Our locomotive designs range from 1500 to 9000 horsepower, and we can provide this alternate fueled motive power on a full service lease in which we provide all maintenance services. The largest bulk materials handling company in the U. S. has stated that they will build, own and operate the solid fuel dispensing stations at no capital cost to the railroads if suitable long term fuel supply contracts can be arranged. When the funding to build and test the prototypes is available, we are ready to put this equipment into production. Cost increases can be addressed by fuel surcharges, but fuel shortages cannot. We can wait until Diesel fuel is not available at any price, or we can start now to make an orderly transition to solid fueled motive power. The alternative is chaos.
Thomas W. Blasingame
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