Welcome, Rick -- and thanks
Peak oil: selected military studies (2007-8)
During the next few days I will post information & links regarding various aspects of energy security.
I will begin with four articles by military analysts who view peak oil as a legitimate concern.
"Peak oil" refers to the point when global oil production reaches its maximum. With current global consumption having reached a thousand barrels a second at reasonably affordable rates, any constraint to the availability of cheap oil is expected to present some significant difficulties.
The following four studies may be of particular relevance to this audience:
1. excellent Armed Forces Journal article by Commander Jeffrey Eggers:
http://www.afji.com/2008/05/3434573
2. another article in the same edition (AFJ, May 08) by Maj. Daniel Davis:
http://www.afji.com/2008/05/3466428/
3. Maj. Davis did a more comprehensive study (37 pgs) in 2007:
http://www.aspo-usa.com/assets/docum..._Precipice.pdf
4. Maj. Cameron Leckie did a concise analysis in Australian Army Journal (Summer 2007, p. 21):
http://www.defence.gov.au/Army/lwsc/...book_PRESS.pdf
There are other studies which could be included but these four are concise, focused, and properly sourced.
Please speak up if anyone sees something which they feel is less than credible.
Peaking vs running out, & UK dilemma
Dayuhan,
I agree completely on your concerns re investment, which confirm the following point: price volatility may be worse than sustained high prices.
If high prices were sustained (prices would need to be sustained for at least a decade in order to achieve the following benefit) then more of the difficult oil would be brought on-stream, thus buying us some much-needed time to develop non-carbon alternatives.
However, a see-saw effect where the price dips regularly subvert such efforts will make investors reluctant to risk their money on something which cannot endure many consecutive months of losses.
But your final point about “an apocalyptic peak oil scenario where the oil simply runs out” makes me wonder if you share a common misconception about peak oil, which is to equate peaking with running out.
This is a very important distinction.
Some peak oil analysts argue that the peak (ie. point of maximum production/flow-rate) should coincide more or less with the half-way point. That is, production will peak when we have extracted about half of the ultimately recoverable reserves.
Personally, I see no causal link between the two, nor did Brent Fisher in his excellent study for the Institute for Defense Analyses (IDA).
Here is a review of his IDA study (2008):
http://www.energybulletin.net/node/49272
But the main point here is that peaking is not about running out, any more than the start of commercial extraction in 1858 (here in Canada, not in Titusville the following year) was about running out.
My bet is that we will have more than half the potentially extractable oil in the ground when we peak., so physical supply may not turn out to be the primary problem after all.
But the central thesis of the peak oil analysts is this: the troubles will start as we approach the apparent peak. It probably will matter little what combination of factors ‘causes’ the peak, and we could have serious difficulties simply from the perception of a peak, even if the perceived peak should later prove to have been a false alarm.
But I agree with everything else that you have said, including the scenario that you describe in your final paragraph.
David in the UK,
I am in regular contact with several UK analysts, both military and civilian.
Your nation seems to be awakening to the unhappy brevity of fossil fuel supply: from having little domestic production other than coal, to the sudden discovery of the wondrous North Sea oilfields, to Mrs. Thatcher’s gung-ho approach to extraction, to the sudden realization that your one-time bonanza had peaked within a generation, and finally to the stark realization that the UK will forever be an importer of oil & gas…. all of this within half a lifetime.
To the UK’s credit, at least they are taking a serious look at how one might manage fuel emergencies, which is more than we can say in North America, where fuel emergencies are barely on the radar.
Brits learned in Sept. 2000 just how problematic a liquid fuels supply problem can be, but here in Canada we have had no such experiences.
We are very complacent….
Three new UK Fuel Emergency plans
This morning I worked my way through three recent UK documents:
1. DECC's Business Continuity Management for Fuel Shortages (Nov. 08)
This brief document (10 pgs) contained the observation that local fuel supplies "could be exhausted within 48 hours of an incident and it could take up to 10 days before stock levels are fully restored" (p.2).
DECC's Maximum Purchasing Scheme would limit purchase for non-essential users to maximum 15 litres (roughly 3 gallons).
This strikes me as a bad idea for two reasons:
1. History: In USA during the 1979 crisis they limited purchases to $5 max, a similar volume. As Yergin states, "The results were exactly the opposite of what was intended, for it meant that motorists had to come back to gas stations that much more frequently" (The Prize, p. 692).
2. Common sense: People will want to top up their tanks as soon as they have gone 75 miles or so.
Topping-up creates line-ups which waste time & additional fuel and increases tensions at the pumps.
Better to have a fixed limit, say 30 litres, no more and no less.
That will reduce topping up.
Emergency pricing will do the rest of the job....
Here is the link:
http://www.cabinetoffice.gov.uk/medi...el_nov2008.pdf
2. NHS Guidance on Planning for Disruption to Road Fuel Supply (Oct. 08)
At 30 pages, this is the most comprehensive of the three documents.
It contained a few interesting observations:
- In the aftermath of Hurricane Katrina, health facilities had power and their lights acted as a beacon (literally) for displaced citizens, and this created some security issues for those facilities.
- This doc has several warnings not to underestimate the complexities of a fuel shortage, which is prudent.
- The "Myth of a Central Fuel List" (p. 14) is interesting... it indicates how seriously businesses view their fuel supply and gives a hint of the efforts that people will go to in order to gain preferential access/Essential User status.
- The recommendation to "attempt to have all workers try public transport options" (p. 14) of course makes sense, but as Kathy Leotta points out, "Transit systems have only limited capabilities for quickly increasing services... due to a small supply of extra vehicles and drivers" (p. 4).
Switching to public transit will be easier said than done.
- Other than its request that "all unforecasted costs... are captured for audit" (p. 17) there is little acknowledgment of the budgetary concerns which could quickly arise. It seems highly unlikely that any free-market economy could have an extended fuel supply problem without also having an extended price spike.
Here is the link:
http://www.dh.gov.uk/en/Publications...ance/DH_089955
3. Heart of Birmingham NHS Fuel Shortage Plan (reviewed June 27/09)
I found this 21-page plan to be the most intriguing of the three since it addresses some of the significant details of managing the Temporary Logo Scheme (p. 4-5), issues around communicating info to the public (p. 6), concerns about supply chain failures, etc.
Returning to the topic of budgetary problems arising during a fuel emergency, it is puzzling to see no warnings in any of these three documents that pricing during a fuel emergency could prove problematic to their budgets and/or to the service delivery capability of their agencies.
In the Birmingham document, the topic of Financial Implications (Sect. 12.0) is raised, but this section contains a single unfathomable sentence: "There are no significant financial implications anticipated in the implementation of this plan" (p. 13).
Similarly, Sect. 10.0 on Training states: "There are no specific training requirements associated with this plan" (p. 13).
Both NHS documents contain some specific and sensible recommendations for personnel, for delivery of services, accountability re fuel use, etc.
One would think that this would surely require some rather detailed consultation with staff (and subsequent training) in order to implement these recommendations.
Here is the link:
http://www.bpcssa.nhs.uk/policies/_h...cies%5C881.pdf
4. Some final comments
To their credit, the UK planners have recognized two central facts:
1. a fuel emergency can be a whopper of a problem, and
2. fuel supply and other emergencies must be addressed at the local level first, hence the need for local plans, pre-authorization & empowerment, etc.
Here in North America, there seems to be little awareness of either fact, and therefore precious little action, especially at the local level.
I fear that even the UK planners may be overlooking the issue of price spikes, the resulting budgetary constraints & economic difficulties, and the potential threat to civil order.
Gas shortages, EU solidarity and North American unpreparedness
Thanks for your posting, Surfer.
Paul Saunders' point is well taken: the combination of a struggling Russian economy and low gas prices means less ability for them to invest at their end to ensure European winter heating.
My focus is more at the other end... how can people plan for and best administer a fuel shortage.
The following may be of interest as the same principle (of solidarity in burden-sharing) is a cornerstone of international response to an oil supply shortage.
European solidarity was briefly tested during the January 09 cut-off of Russian gas, but the result was hardly encouraging.
A few weeks later, the former executive director of the IEA, Claude Mandil said that a central lesson learned from the crisis is, “Solidarity is still just words.” He went on to cite the example of Italy, saying, “Italy doesn’t care for a second for the global supply of Europe, which is the exact opposite of European solidarity.”
The full transcript is here:
http://www.euractiv.com/en/energy/ma...article-179254
Should this winter prove to be a cold one, Europe will be worried.
Meanwhile, we North Americans need to thoroughly examine this issue. Should anything interfere with our supply of affordable fuel (whether liquid fuels or gas) during the Canadian/North Dakota winter, we would have a most formidable problem on our hands... one which (like Ice Storm '98, which knocked out our electricity in January) must be dealt with at the local level.
The problem is that when it comes to fuel, we have no local plans.
The Brits and Australians are onto this in a serious way, and they barely have a winter.
We North Americans don't believe it will happen over here.
Thanks for your interest.
link to UK Food Supply Chain study
Sorry, folks
Surferbeetle alerted me to the fact that the link which I provided in posting #11 no longer leads to Helen Peck's study.
I'm not sure why, and that is unfortunate because it provided a concise intro which people could examine before linking to the study itself.
Here is a direct link to Helen Peck's "Resilience in the Food Chain" (July 06):
http://www.cranfield.ac.uk/cds/depar...l%20report.pdf
Sorry for the confusion
rm