IEA: Governments need to rethink reliance on oil

[samagon]

sorry if I should have posted this in one of the OT areas, I wasn't sure where to post it, I am hoping thoughtful discussion on how this relates to Houston will follow

I have done some searching and it looks like the IEA made the announcement of peak oil back in November, I must have missed the articles, anyway, now they are saying we need to plan an exit strategy.

http://green.autoblog.com/2011/05/03/iea-governments-need-to-rethink-reliance-on-oil/

The International Energy Agency (IEA) is an independent, multi-government group formed out of the wake of the 1973 oil crisis. The Agency forecasts oil production and monitors international oil markets and energy sectors. Just five years ago, the IEA rather confidently predicted that oil production would rise to 120 million barrels per day by 2030. Well, there's been a change in outlook.

Now, IEA chief economist Fatih Birol says that the world's crude oil production peaked backed in 2006. Furthermore, Birol predicts that oil prices will rise by 30 percent over the next three years. That price hike, according to Birol, is due to declining access to crude and because some of the world's largest oil producers will intentionally slash output to artificially drive up prices.

Birol says that although peak crude oil production is behind us, abundant natural gas could provide a viable alternative. The IEA says that governments around the world need to rethink their reliance on oil. That's a statement that we can wholeheartedly agree with.

Nat Geo ran something on this back in November last year. http://news.nationalgeographic.com/news/energy/2010/11/101109-peak-oil-iea-world-energy-outlook/

Anyway, as someone who grew up in Houston (and I'm sure most of us are the same) in the 80s, I am very interested in how everyone thinks this will impact us?

I mean, we are more diversified as a city than we were in the past when everyone worked in the oil industry, Houston is a desirable place to work and live for many people of many different industries. we've got the med center, lots of technology, arts, we're the headquarters of a lot of big corporations, but we're still hugely entrenched in the oil industry. How is something like this going to affect Houston today?

What about the sprawling nature of our city? Are more people who work in the core, but live in the burbs going to be drawn to live in the core?

Are we going to see more bicycles, or motorcycles? More money funneled into building out rail options quicker?

I don't know, maybe things will just keep on trucking along and people will just keep paying through the nose happily, myself I've decided that since the scooter I recently got can't get me safely to work, I'm going to get a motorcycle specifically because of it offering 80mpg, keep my car for rainy days and cold weather, and fun jaunts. I'm going to probably increase the size of my backyard garden and grow more vegetables. The neighbor who lets their chickens ransack my backyard may end up missing one and I will have a steady supply of eggs (this is more of a joke, but still frustrating).

Anyway, the IEA has always been very up-beat about this whole oil thing, even back a few years ago (as the article states) they were predicting 2030 for peak oil, and now they're saying we're past it, I also watched the movie "A Crude Awakening" which paints a none to rosy picture about what we have to look forward to after peak oil.

What say you? How do you think this will effect our local economy, living situations, transportation habits, and you personally?

[august948]

sorry if I should have posted this in one of the OT areas, I wasn't sure where to post it, I am hoping thoughtful discussion on how this relates to Houston will follow

I have done some searching and it looks like the IEA made the announcement of peak oil back in November, I must have missed the articles, anyway, now they are saying we need to plan an exit strategy.

http://green.autoblo...eliance-on-oil/

Nat Geo ran something on this back in November last year. http://news.national...energy-outlook/

Anyway, as someone who grew up in Houston (and I'm sure most of us are the same) in the 80s, I am very interested in how everyone thinks this will impact us?

I mean, we are more diversified as a city than we were in the past when everyone worked in the oil industry, Houston is a desirable place to work and live for many people of many different industries. we've got the med center, lots of technology, arts, we're the headquarters of a lot of big corporations, but we're still hugely entrenched in the oil industry. How is something like this going to affect Houston today?

What about the sprawling nature of our city? Are more people who work in the core, but live in the burbs going to be drawn to live in the core?

Are we going to see more bicycles, or motorcycles? More money funneled into building out rail options quicker?

I don't know, maybe things will just keep on trucking along and people will just keep paying through the nose happily, myself I've decided that since the scooter I recently got can't get me safely to work, I'm going to get a motorcycle specifically because of it offering 80mpg, keep my car for rainy days and cold weather, and fun jaunts. I'm going to probably increase the size of my backyard garden and grow more vegetables. The neighbor who lets their chickens ransack my backyard may end up missing one and I will have a steady supply of eggs (this is more of a joke, but still frustrating).

Anyway, the IEA has always been very up-beat about this whole oil thing, even back a few years ago (as the article states) they were predicting 2030 for peak oil, and now they're saying we're past it, I also watched the movie "A Crude Awakening" which paints a none to rosy picture about what we have to look forward to after peak oil.

What say you? How do you think this will effect our local economy, living situations, transportation habits, and you personally?

Whether it's now or in 20 years, we're still facing the same thing...less oil and more demand...ergo prices will go up in the long run. We're entering (or are already in) a transformative transition period that will be noted in history books long after we're dead much like the industrial revolution. Easy and cheap access to oil is what got us the last 100 years or so of technical progress and now we're going to have to improvise, adapt and overcome. We've got the nascent technologies to do much of that but it will take a while to make the expensive and painful transition. Cold comfort for most of us as that really means decreased standards of living while we transition but, hopefully, better standards for our children or grandchildren.

For our local situation, that means good times for the next few years as the oil-related companies, especially those who have their own production, will benefit from the higher prices. Long term depends on what technologies get implemented on a wide scale and where those companies are based. On the consumer side people will respond to the cost by cutting back and finding alternatives. I suspect that employers will react by being more flexible with remote working and alternate schedules as well as supporting public transportation for their workers (as some already do). Retailers will adapt by spreading out with more locations closer to communities as people won't be willing to travel as far as they used to. Some folks will decide to move closer in to the city proper, but, provided the right infrastructure is available from employers and retailers as noted above suburban dwellers may become more focused on their local towns.

Personally, I put together my "urban assault bike" a few years ago and use it when I can to run errands and go to the stores. Since I work at home, commuting is not an issue. My only real problem is dealing with escalating electricity costs. Might end up putting solar panels on the house at some point.

[marmer]

The biggest issue is not private cars and gasoline. Within reason, electrics and mass transit could meet a lot of people's everyday transportation needs. Not as conveniently as gasoline does now, but it's at least an alternative. The diesel world and the aviation world don't have any alternatives. I believe that within our lifetimes auto gasoline will go away completely and the refinable petroleum will go to railways, heavy trucking, ships, and aircraft only. Lose those things and the world's quality of life declines precipitously.

[august948]

The biggest issue is not private cars and gasoline. Within reason, electrics and mass transit could meet a lot of people's everyday transportation needs. Not as conveniently as gasoline does now, but it's at least an alternative. The diesel world and the aviation world don't have any alternatives. I believe that within our lifetimes auto gasoline will go away completely and the refinable petroleum will go to railways, heavy trucking, ships, and aircraft only. Lose those things and the world's quality of life declines precipitously.

Something else we might see is goods production returning from overseas as it becomes more expensive to ship goods across the Pacific and as economies like India and China mature and wages rise there.

[samagon]

Something else we might see is goods production returning from overseas as it becomes more expensive to ship goods across the Pacific and as economies like India and China mature and wages rise there.

Well, that's not a positive outlook for the port of Houston.

But, as air travel prices will no doubt increase at a substantially higher clip than ship travel, it may draw more people to go on Cruises out of Galveston, as I'm sure converting to alternate forms of power will be easier for boats than planes.Then that may also mean lower costs for shipping, which would not mean a bad outlook for the POH.

Edited May 4, 2011 by samagon

[jgriff]

I'm not going to state my opinion peak oil. I can give you a few facts though.

I'm currently working on two grass roots refinery projects. These are the newest and most technologically advanced refineries in the world. They are both very large refineries in the 400,000 bpd league. Most process plants like these are built assuming a 40 year life span. Some of the ones we have here in Texas are already at or past a 100 year lifespan. I've climbed up fractionating towers in Port Arthur myself that have been running since 1938.

The project value of these refineries is around $12 billion each. The size of the plants are large enough to stretch from 2016 Main all the way into The Heights. The first one will be completed in late 2014, the second is so far off that I don't know when it will be done. Someone with a lot of money and technological expertise that is beyond the what the IEA has is not worried about running out of crude anytime soon. Maybe they are right, maybe not.

[jgriff]

I'm also working on a project that converts bio-mass to crude and then into gasoline and diesel. It's a local Houston company that has a proprietary process for doing this. The first industrial scale plant is under construction right now. The plants are feed-stock flexible. They can convert switchgrass, sorghum, yard waste, wood chips, etc.. into crude and then into gasoline and diesel. I've been trying to get a chance to ask them if their technology would be economically feasible for using all the bio-mass that is created when a hurricane comes through Houston. Remember how much trouble we had getting rid of all the limbs and trees after Ike? It sure would be nice to have a company that would buy all that waste instead of having to pay a landfill to take it.

[ricco67]

I'm also working on a project that converts bio-mass to crude and then into gasoline and diesel. It's a local Houston company that has a proprietary process for doing this. The first industrial scale plant is under construction right now. The plants are feed-stock flexible. They can convert switchgrass, sorghum, yard waste, wood chips, etc.. into crude and then into gasoline and diesel. I've been trying to get a chance to ask them if their technology would be economically feasible for using all the bio-mass that is created when a hurricane comes through Houston. Remember how much trouble we had getting rid of all the limbs and trees after Ike? It sure would be nice to have a company that would buy all that waste instead of having to pay a landfill to take it.

now THAT would be a boon around here.

Can you think of how the greens keepers would be even more motivated to keep the darned clippings and take it with them?

Anything you can tell us about?

[samagon]

I think that the article means, standard oil (well, not Standard Oil that became Exxon, or Texaco, or Mobile, or whichever) as in 'light sweet crude' is peaked. the cheapest, easiest to refine, we don't have to process it before we refine it into gasoline, or diesel, or jet fuel, or kerosene, or whatever. what we're left with is oil sands, heavy oil, bio conversion, costly stuff that has to be processed before it can be refined. at least, that's the best I can understand, so maybe Houston financially as the energy capitol will still be very strong, but prices we pay, for gas, for food, for everything will jump be going up, because we're running out of the easy stuff, and now we've got to use the hard stuff.

they're building a huge pipeline (from what I understand) from Canada where those oil sands are, all the way down here to Houston (or they're trying to) so they can refine it.

To your point about the refineries... refineries are amazingly huge, they're like big 3d version of wiring schematics but they are used for fluids, I've been in my share of them (oddly none in the Houston area), and I couldn't begin to understand them, and luckily I don't have to!

[TheNiche]

I think that the article means, standard oil (well, not Standard Oil that became Exxon, or Texaco, or Mobile, or whichever) as in 'light sweet crude' is peaked. the cheapest, easiest to refine, we don't have to process it before we refine it into gasoline, or diesel, or jet fuel, or kerosene, or whatever. what we're left with is oil sands, heavy oil, bio conversion, costly stuff that has to be processed before it can be refined. at least, that's the best I can understand, so maybe Houston financially as the energy capitol will still be very strong, but prices we pay, for gas, for food, for everything will jump be going up, because we're running out of the easy stuff, and now we've got to use the hard stuff.

Economically feasible oil is still oil. It doesn't matter where it comes from. Above various price thresholds, the theoretical supply of oil (and hydrocarbon alternatives) becomes ridiculously vast. Price is also an incentive to develop technologies that are beyond our present comprehension; that's what has always happened when 'peak oil' was hypothesized in the past.

The problem with oil is not global physical supply; it is geopolitical.

[TheNiche]

What about the sprawling nature of our city? Are more people who work in the core, but live in the burbs going to be drawn to live in the core?

Yes, but for unrelated reasons. Gradually, parts of HISD will be perceived as not sucking. That's the tipping point.

And even then, only one 1 in every 22 households is formed inside the loop. The urban core might become several times as popular and the old trend will survive.

Edited May 5, 2011 by TheNiche

[TheNiche]

Something else we might see is goods production returning from overseas as it becomes more expensive to ship goods across the Pacific and as economies like India and China mature and wages rise there.

Ship travel is the least energy-intensive form of transportation by a huge margin. The graphic below indicates CO2 output per tonne-kilometer, which is probably a decent proxy for energy efficiency. I'm not saying that higher energy costs will make international trade cheaper, just that it doesn't make as huge of a difference as you might think.

Air transport is another matter, obviously.

Edited May 5, 2011 by TheNiche

[marmer]

Ship travel is the least energy-intensive form of transportation by a huge margin. The graphic below indicates CO2 output per tonne-kilometer, which is probably a decent proxy for energy efficiency. I'm not saying that higher energy costs will make international trade cheaper, just that it doesn't make as huge of a difference as you might think.

Air transport is another matter, obviously.

Wow. That is very interesting. Thanks for posting that. I wonder if we will see the end of passenger aviation and the just-in-time FedEx based business model due to fuel costs and CO2 pressures within this generation. My guess is it will return to something like the "luxury" status it had back in the 50s and 60s, used by only the very wealthy. It sure does look to me like ocean-liner passenger travel might make a plausible comeback.

[samagon]

Ship travel is the least energy-intensive form of transportation by a huge margin. The graphic below indicates CO2 output per tonne-kilometer, which is probably a decent proxy for energy efficiency. I'm not saying that higher energy costs will make international trade cheaper, just that it doesn't make as huge of a difference as you might think.

Air transport is another matter, obviously.

That's good info! And it certainly makes the Port of Houston look like it will have a very bright future in a future with higher energy costs.

It also makes Galveston as a tourist destination look pretty good too. People who would travel in the USA to various destinations by air, may choose to take a cruise out of Galveston to visit some other destinations as the cost of air travel goes up exponentially compared to sea travel. This in turn would make people consider stopping in Houston as part of that tourist vacation...