Peak oil meets climate change

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Peak oil meets climate change The numbers game of
the century Jeremy Leggett
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US-48
USA 48
1956 Hubbert predicts US production peak in
1971
production
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US-48
USA 48
1998 Campbell Laherrere the first oil
industry early-toppers speak out
production
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Everyone agrees oil is finite
There are two views of quite how 1

• Late Toppers
• Topping Point (peak of production) in 2030s
• Forty years supply at least (Lord Browne, 2004)
• Believers
• most oil companies and OPEC
• almost all financial analysts journalists
• all governments and agencies, e.g. IEA
• Implications
• economies can continue growing in principle
• there will be time to develop alternatives

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Everyone agrees oil is finite
There are two views of quite how 2

• Early Toppers
• Topping Point (peak of production) this decade
  and the market will wake up to this soon
• Believers
• a growing number of dissident experts .mostly
  oil company geologists
• some financial analysts journalists
• some futures traders
• Implications
• economies will be dislocated
• there will be no time to develop alternatives

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The Peak Oil stakes summary
A serious demand-supply discontinuity could lead
to worldwide economic chaos.
DoE Office Naval Petroleum Oil Shale
Reserves, 2005
We are not good at recognising distant threats
even if their probability is 100. Society
ignoring this is like the people of Pompeii
ignoring the rumblings below Vesuvius.
James Schlesinger, former US Energy Secretary,
2005
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Leggetts qualifications on this issue

• Geologist consulting in the oil industry,
  19801989
• Research funding from BP, Shell, among others, at
  Royal School of Mines, Imperial College,
  including for oil source rock studies and seismic
  stratigraphy.
• Taught on petroleum geology and engineering
  undergraduate and postgraduate courses.
• Exploration and consultancy with Hydrocarbon
  Development Institute of Pakistan, Japan
  Petroleum Exploration Corporation among others.
• Two major international awards for research from
  the premier UK professional body for geologists,
  the Geological Society.
• Environmental campaigner (energy), 1989-1996
• At the international Climate Convention
  negotiations and the Intergovernmental Panel on
  Climate Change.
• Renewable energy industry executive, 1997-present
• Founding director of worlds first renewable
  energy private equity fund, Bank Sarasins New
  Energies Invest AG, 2000-present.
• CEO of UKs largest independent solar solutions
  company 1999-present.
• Member of UK Governments Renewables Advisory
  Board 2001-2006.

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Real Discovery Trend
World
60
50
Expectation of future production
40
30
Gb
20
10
?
0
1930
1950
1970
1990
2010
2030
2050
Past discovery
Future discovery
Past production
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Real Discovery Trend
World
60
50
Expectation of future production
40
30
Gb
20
Future production
10
0
1930
1950
1970
1990
2010
2030
2050
Past discovery
Future discovery
Past production
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Dwindling discovery

• Statistics for giant oilfields of 500 million
  barrels of more
• Context at gt80 million barrels per day current
  global demand, 500 mb is less than a weeks
  global supply
• In 2000 there were 16 discoveries
• In 2001 there were 9
• In 2002 there were just 2
• In 2003 there was 1
• In 2004 none
• In 2005 there was 1

Source Petroleum Review
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The demand /supply challenge summarised

• We need 2-3 million barrels per day more each
  year (c. 1.8 growth rate)
• We are depleting at 4-5 mbd each year
• So in total we need to find 6-8 mbd of new oil
  each year
• .one Saudi Arabia every year and a bit
• .How did we do in 2005? 3.7 mbd
• It cant be done indefinitely. Its not
  sustainable.

Sadad al-Husseini, former head of Exploration and
Production, Saudi Aramco, August 2005
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?
2
6
80
Second energy crisis 1979 to 1981
2003 prices
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Peak oil
1
40
3
5
4
20
prices of the day
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
16
?
2
6
80
Second energy crisis 1979 to 1981
2003 prices
60
Peak oil
1
40
3
5
4
20
prices of the day
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
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A quarterly audit of 2006
Q1
Q2
Q3
Q4
1.07
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A quarterly audit of 2006
Q1
Q2
Q3
Q4
1.07
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A quarterly audit of 2006
Q1
Q2
Q3
Q4
1.07
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A quarterly audit of 2006
Q1
Q2
Q3
Q4
1.07
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A quarterly audit of 2006
Q1
Q2
Q3
Q4
1.07
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Reasons to fear global warming

• 7. Threat to food supplies
• 8. Threat to water supplies
• 9. Threat to human health
• 10. Increased risk of conflict
• 11. Threat to societal stability
• 12. Danger of amplifying feedbacks

• The degree
• The rate
• Biodiversity loss
• Sea level rise
• Threat to insurance industry
• Threat to capital markets

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CO2 and fossil fuel use 1861 2100
CO2 Concentration (ppmv)
Atmospheric CO2 concentration parts per million
Years before present
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Surface temperatures 1000 2100 AD
Departures oC from the 1961 1990 avge.
Year AD
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billion tonnes carbon of carbon
TOTAL COAL RESOURCE
3,500
3100
2oC THRESHOLD
TOTAL OIL RESOURCE
TOTAL GAS RESOURCE
400
700
500
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billion tonnes carbon of carbon
TOTAL COAL RESOURCE
3,500
3100
2oC THRESHOLD
TOTAL OIL RESOURCE
TOTAL GAS RESOURCE
400
700
500
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Conclusions

• Can we go zero carbon on renewable and efficient
  energy?
  Yes, more quickly than most think
• Will we? Will we even go low carbon? The jury
  is out
• Can we plug the energy crisis if the early peak
  on oil production is correct?
  No, and neither can anything else
• .the silver lining to the cloud is going to be
  about renaissance, and going renewable versus
  going coal

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