The new JOE on oil supply
It's getting late... don't know if I can respond to your points before I fade.
I've spent the last several hours doing a review of the energy section in the new JOE, which I just spotted in the late afternoon.
It should be posted on EB in the morning... these are my observations:
The Joint Operating Environment 2010: Oil Supply Concerns
The February 2010 version of the Joint Operating Environment (JOE) is fundamentally similar to its predecessor, which was released in November, 2008.
Its overall structure is only slightly altered, and much of the text is identical.
Amid the multitude of security concerns, petroleum supply has moved rapidly to the forefront, and it is this issue which is the focus of this review.
The main oil supply vulnerabilities which were cited in 2008 are reiterated, thus indicating that there has been no amelioration.
It states that “oil and coal will continue to drive the energy train” until 2030, though it warns that in order to do so, “the world would need to add roughly the equivalent of Saudi Arabia’s current production every seven years” (p. 24).
Significantly, a text box has been added entitled, “Peak Oil” which states in part: “… Assuming the most optimistic scenario for improved petroleum production … [it] will be hard pressed to meet the expected demand of 118 million barrels per day [in 2030].” (emphasis added)
The JOE also states, “The central problem for the coming decade will not be a lack of petroleum reserves, but rather a shortage of drilling platforms, engineers and refining capacity” (p. 24).
Many peak oil analysts, including this reviewer, would agree with that statement. There is enough oil to get us through this decade, but a decade is a very brief period in time.
The following decade could be a very different story.
Drilling platforms and experienced engineers will indeed be at a premium, since land-based and shallow-water options seem be running out.
As for refining capacity, we seem to be going the other way, with refiners struggling and numerous closures world-wide.
A graph at the bottom of page 25 illustrates the precipitous drop in production from existing wells and the relatively small flow which can be obtained from non-conventional oil.
Given the ongoing use of natural gas to produce bitumen, the contribution of non-conventional oil would be even less significant if “net energy” were factored in.
The text box on Possible Future Energy Resources is similar to its 2008 predecessor and again highlights the fact that despite intensive research and improved efficiencies, the contributions of oil sands and shale, biofuels, wind and solar will be minimal.
The JOE then warns, “A severe energy crunch is inevitable without a massive expansion of production and refining capacity” (p. 28).
To add to the urgency, it restates its 2008 warning, “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD” (p. 29).
This warning is entirely consistent with others which have been voiced during the past 18 months (eg. the repeated verbal statements made by IEA chief economist Fatih Birol, the 2008 WEO, Paul Stevens of Chatham House, etc.).
Unfortunately, the JOE again fails to address two obvious “next questions:”
- To what degree might a global supply crunch constrict oil exports?, and
- How can we best prepare for and administer a liquid fuel emergency?
Both questions need to be addressed urgently, regardless of how close we are to peak oil.
While the JOE warns, “The implications for future conflict are ominous,” it fails to mention the internal strains which an oil supply crunch could place on civil order at home.
It acknowledges the potential for a prolonged US recession, deep cuts to defense spending, diminished capabilities “at the moment they may have to undertake increasingly dangerous missions” (p. 28).
However, the JOE makes no mention of the potential threat to civil order on the home front.
The difficulty of maintaining the domestic food supply chain and other essential services in the face of unprecedented energy prices needs to be considered as a reasonably probable piece of the future operating environment, given that the JOE’s own evidence points to a high probability of the very circumstances which could trigger such conditions.
The JOE’s Energy Summary is not optimistic.
It does not mention peak oil a second time, but reiterates its prior warning that “production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity” (p. 29).
In short, raising the profile of oil supply problems within the JOE is a helpful step. Perhaps civilian as well as military planners will take note.
The entire document is a curious mix of philosophical quotes, a hard-nosed assessment of some very formidable issues, and some very astute lessons from history.
For many decades, cheap fossil fuel has been something which we have taken for granted: for most of us, it’s simply another bill to pay.
Suddenly, concerns about its future availability are rocketing to the forefront. If nothing else, those lessons from history should warn us of our human tendency to see what we want to see.
What many of us see is an endless supply of cheap oil for our grandchildren and beyond.
This JOE prudently encourages us to look again….
Here is the link:
http://www.jfcom.mil/newslink/storya...JOE_2010_o.pdf
Gen. Wesley Clark on energy security (video)
One of Canada’s finest journalists is Steve Paikin at TV-Ontario.
In October 2009 he interviewed Gen. Wesley Clark (Ret) on the topic of energy security (28 mins).
This interview is currently posted at the Journal of Energy Security.
Gen. Clark has an excellent grasp of these complex issues and some very clear ideas about what we can and should do about them.
The topics discussed (with start-times) are:
1m – history of US oil supply
5m – resource nationalism
10m – role of Canada (tar sands, etc)
13m – nuclear
16m – ethanol, transport fleet
19m – corn production
20m – US total energy consumption, alt energy, transportation vs stationary
24m – Clark’s investments & interests
25m – opposing interests & political change
27m – climate change threat
Here is the link:
http://www.ensec.org/
USNORTHCOM Electric Energy Security in the Domestic Theater
Some really neat graphics and outlines in Northern Commands report.
A good explanation of smart grid for installations as well.
It's a good overview.
PFC Report for International Energy Forum
First, thanks for your info on grid vulnerabilities, CD.
Your link confirms the concerns expressed at the Oct. 09 ASPO conference by a Homeland Security analyst... there are some very serious grid vulnerabilities with direct relevance to domestic base installations.
Meanwhile, I want to offer this, a petroleum study commissioned for last week's International Energy Forum which was held in Cancun, Mexico.
Some of the key points made in the IEF report by PFC Energy are (emphasis added):
- because of "a consistent set of trends" the PFC Energy projection is much less optimistic than those made by either the IEA or OPEC: "The divergences in supply forecasts are stark and significant.... PFC Energy sees liquids output at 89.8 mmb/d in 2030, after peaking between 2020-2025 around 95.0 mmb/d" (p. 9).
- "the fact that so much of the world's production is probably on irreversible decline is the key factor in restraining global output growth" (p. 10).
- "the challenge [of the plateau and onset of irreversible decline] is coming, and this emerging world of limited conventional production will require major adjustments..." (p. 13).
- "governments [must] appreciate the gravity of the challenge and the need for immediate and concerted policy initiatives..." (p. 13).
The original PFC Energy report is available here:
http://www.ief.org/whatsnew/Document...ertainties.pdf
Tomorrow a letter will be sent to Canada's energy minister, asking how this PFC assessment (and the abundance of prior warnings, both civilian and military) fits with the Canadian government's ongoing position that "there is no peak oil challenge."
I will let you know what answer I receive, if any.
Last week's International Energy Forum
The letter below was sent this morning to Canada's Minister of Natural Resources, in connection with the PFC study which was commissioned for last week's International Energy Forum in Mexico.
Dear Minister Paradis
I have just finished reading the report commissioned by the International Energy Forum entitled Unpacking Uncertainty: Investment Issues in the Petroleum Sector.
This report was authored by PFC Energy in July 2009 (44 pgs) and it is my understanding that it was the subject of some analysis by the world's energy ministers (including yourself) at the International Energy Forum in Cancun, Mexico last week.
As you are aware, some of the key points made by PFC Energy are (emphasis added):
- because of "a consistent set of trends" the PFC Energy projection is much less optimistic than those made by either the IEA or OPEC: "The divergences in supply forecasts are stark and significant.... PFC Energy sees liquids output at 89.8 mmb/d in 2030, after peaking between 2020-2025 around 95.0 mmb/d" (p. 9).
- "the fact that so much of the world's production is probably on irreversible decline is the key factor in restraining global output growth" (p. 10).
- "the challenge [of the plateau and onset of irreversible decline] is coming, and this emerging world of limited conventional production will require major adjustments..." (p. 13).
- "governments [must] appreciate the gravity of the challenge and the need for immediate and concerted policy initiatives..." (p. 13).
These expressions of concern (and there have been many others since the release of the Hirsch Report five years ago) are not reflected in the position or policies of your department.
Since your Ministry has the lead on energy issues, other departments (eg. Agriculture and Agri-food Canada) are unable to incorporate these concerns in their policies or even their research.
For years, the position of Natural Resources Canada has been that "there is no imminent peak oil challenge" and therefore there is no need for a formal examination of the issue.
As you are aware, other jurisdictions (USA, Australia, UK) have conducted thorough analyses and concluded that the peaking of global oil production constitutes "an unprecedented risk management problem" (Hirsch Report, p. 4).
The ongoing complacency of our federal government is no doubt due to the tar sands, which represent Canada’s only hope of growing production given that conventional oil production has been in decline for decades (even considering the relatively minor amounts of new east coast production).
I and others who have expressed concern about peak oil to your Department are invariably told that thanks to the tar sands, "Canada's oil supply is secure for about 200 years."
However, this argument fails to account for the fact that oil is a globally priced commodity and there are no plans for government intervention with respect to oil pricing or security of supply.
All Canadians, including our essential service providers and our hard-pressed farmers, must pay the world price, which can be expected to increase substantially due to peak oil, followed by potential physical supply disruptions.
Furthermore, eastern Canada is not served with tar sands oil and in fact is highly dependent on imported oil, and (pipeline logistics aside) NAFTA constrains the shifting of production from exports to the USA to serve eastern Canada.
Consequently, my request is both prudent and direct:
In light of the information in the PFC Energy report, the discussions which took place in Cancun, the growing body of evidence which points to both a near-term supply crunch (2011-2015) and a likely peak in global oil production within the next decade, and the vulnerability of all Canadians to an oil price spike, will your department now conduct a formal analysis of peak oil and how our nation can best deal with its expected effects?
- Rick Munroe
National Farmers Union
Howe Island, Ontario