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Page added on August 19, 2017

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Oil is not going away for decades- if ever

Consumption

An impending terminal crisis in net energy is looming over the global economy, according to Jonathan Rutherford of Insurgent Intelligence. The kind of growth that some multinational companies have been conducting is “green growth,” he notes with no signs of “degrowth.”

“In my view, at best, they will vigorously pursue ‘green’ growth, i.e. via the rapid scaling up of renewable energy and promoting efficiency etc., but with no intention of actively reducing the overall level of energy consumption — indeed, most of the mainstream ‘green growth’ scenarios assume a doubling of global energy demand by 2050,” he writes.

Stated simply, Rutherford does not believe that growth in green energy supplies will outpace or even keep up with global energy demand. With energy supply being critical to global economic prosperity, he argues that an energy crisis is looming and could stall economic growth.

There is a trend that Rutherford observes regarding “green growth,” which is the increase in using renewable energy. However, he says that while more companies will incorporate this energy path, the overall amount of energy being used will increase.While advanced societies will continue to invest in green growth and tax and control carbon-based energy- they will not find adequate sources to keep up with the demand put on by a digital economy.  Society is left with two choices- either slow down economic growth through campaigns to control the amount of economic activity or continue to use fossil fuels. History suggests that humans will choose the later.

Rutherford quoted a report he co-authored with Josh Floyd and Samuel Alexander for Resilience. The authors cited how “green growth” does not add up to the outlook of “long-term sustainability.

An argument that supports the skepticism surrounding energy sustainability was given by Minqi Li, Professor of Utah University’s Department of Economics. “An increase in economic growth rate by one percentage point is associated with an increase in primary energy consumption by 0.96 percent,” she wrote.

Australia was used as an example to express doubts as to whether the supply can meet the demand. One risk explicitly stated how the pressure for “tree plantations to compete with critical land-uses” would mean less land for agricultural uses.

Rutherford states,  “economic growth depends on not just increases in gross energy consumption and energy efficiency, but the availability of net energy. Net energy can be defined as the energy left over after subtracting the energy use to attain energy- i.e. the energy used during the process of extraction, harvesting and transportation of energy. Net energy is critical because it alone powers the non-energy sectors of the global economy.”

He goes on to describe his skeptism that net energy will keep up with demand growth.

“There are strong reasons for thinking that the rate of increase in gross energy availability will slow further in coming decades. Recently a peer reviewed paper estimated the maximum rate at which humanity could exploit all ultimately recoverable fossil fuel resources. It found that depending on assumptions, the peak in all fossil fuels would be reached somewhere between 2025–2050 (a finding that aligns with several other studies see i.e Maggio and Cacciola 2012; Laherrere, 2015).”

Currently, fossil fuels make up 86% of energy use and shockingly enough has been practically unchanged for over three decades, even after the trillions of dollars in investments in alternative sources (solar, hydroelectric, nuclear, wind, and even bio).

It gets even more alarming when you consider that over 95% of all fuel used for transport comes from oil. With 60-80% of oil fields in decline, even the recent advancement of fracking will not solve the supply problem. Combine this with the depletion of recoverable coal reserves and you have a problem. Rutherford argues that using current growth projections of energy use, the world needs to find four Saudi Arabia equivalent sources of oil to provide global energy demand. He projects that an oil capacity crunch will cause a major price spike and send the economy into a tailspin.

While there has been a ton of investments in green transportation, there is little reason to think that oil demand will subside anytime soon. To date, there has been no evidence that oil demand is in decline and with lower oil prices demand continues to accelerate.

In order for green technologies to supply the necessary supply for global energy demand by 2035, an investment of $3 trillion a year would be required. Compare this with the current estimates of all energy investments in 2035 (including carbon forms) of being just $2 trillion dollars. Current oil demand is outstripping all renewable investments and supplies and will continue through 2050.

Regardless of how you feel about a carbon-based economy, it turns out to be good for the trucking industry. The energy sector is one of the largest sectors providing demand for truckload services. Ranging from equipment to service the drilles, to the sand that helps fracking operations, oil demand has a huge impact on the number of industry-wide truckload miles. For every rig that is drilled in North America, results in an additional 1.1 million truckload miles. 

In places like North Dakota and Canada, the impact is even more profound. According to a study from the North Dakota State University (home of the Bison and one of the greatest dynasties in college football history), fracking contributed over $35B to the state’s economy, of which half went to trucking operations.

In transportation, energy use is behind some company’s decisions in vehicle design. Tesla is developing an electric truck, but Toyota has taken a different path. The Japanese automaker’s Project Portal is developing a big rig powered by hydrogen. A gif attached in the article by Jalopnik demonstrated how a Toyota big rig powered by a fuel cell is twice as fast as that of a diesel-powered big rig. Both rigs were reported to have a load of 35,000 lbs.

Jalopnik was quick to note in its article that the hydrogen powered rig is not yet a fully-developed “electric truck.” The hydrogen fuel-cell powered truck was described as a prototype based on a Kenworth T660. Much of the energy comes from two 6kwH lithium-ion batteries and 4 high-pressure hydrogen tanks. With a 1,325 lbs.-ft. of torque and 670 horsepower, it fits the profile of a classic Class 8 rig.

Nikola One is another company developing a hydrogen-powered electric truck.

DHL recently unveiled its contribution to the electric truck, Electrek reports. Working with Ford, DHL adapted a Transit van to create the StreetScooter WORK XL.

DHL takes pride in being “a market leader in green logistics” as one of the members of the Board of Management Post, Jurgen Gerdes, claimed. He sees the electric truck as “the perfect vehicle for parcel deliveries in major cities.” Allowing the company to meet the demand for “rising parcel volumes in an even more environmentally friendly and quieter manner.”

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11 Comments on "Oil is not going away for decades- if ever"

  1. rockman on Sat, 19th Aug 2017 2:53 pm 

    Said with much fewer words: global primary consumption has steadily increased from 100 exajoules per year in 1950 to 500 exajoules in 2010 with ZERO INDICATION the trend is decreasing. The obvious questions: what will be the source decades down the road? And if those sources (oil, NG, coal, renewables) are actually available what will be the cost and will the global economy be able to afford that expense as it has for almost 70 years?

    https://ourfiniteworld.com/2012/03/12/world-energy-consumption-since-1820-in-charts/

  2. shortonoil on Sat, 19th Aug 2017 3:06 pm 

    “With energy supply being critical to global economic prosperity, he argues that an energy crisis is looming and could stall economic growth.”

    There are 3.59 times as many motor vehicles in the world today as there were in 1960. The world is pumping 32.9 times as much oil to power them. It now requires 9 times as much crude to power 1 vehicle as it did in 1960. That quantity is growing exponentially. A crisis may be a bit of an understatement!

    http://www.thehillsgroup.org

  3. Dredd on Sat, 19th Aug 2017 3:43 pm 

    rockman,

    No problemo so long as death and sickness are irrelevant (Oil-Qaeda Refineries USeh?).

  4. Shortend on Sat, 19th Aug 2017 5:01 pm 

    Don’t worry too much, fellas, AGW will finish us off soon enough, regardless of the debate of when the oil age peters out.
    Kinda silly to worry about it so much at our advanced age. Won the lottery and fretting about the one time gift being taken away!
    Life gave us a lot and we have a fit when it takes a bit away.
    Ah, that’s too bad.

  5. GregT on Sat, 19th Aug 2017 5:23 pm 

    “Allowing the company to meet the demand for “rising parcel volumes in an even more environmentally friendly and quieter manner.”

    There is nothing environmentally friendly about parcel delivery.

    Even more environmentally friendly? More environmentally friendly than what?

  6. MASTERMIND on Sat, 19th Aug 2017 8:39 pm 

    Conventional Oil Peaked in 2006 –IEA

    http://imgur.com/a/hccu9

    New Oil discoveries by scientists have been declining since 1965 and last year was the lowest in history –IEA

    http://imgur.com/a/W60yn

    International Energy Agency Chief warns of world oil shortages by 2020 as discoveries fall to record lows

    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Saudi Aramco CEO believes world oil shortage coming despite U.S. shale boom

    http://www.foxbusiness.com/markets/2017/07/10/saudi-aramco-ceo-believes-oil-shortage-coming-despite-u-s-shale-boom.html

    UAE warns of world oil shortages ahead by 2020 due to industry spending cuts

    http://www.arabianindustry.com/oil-gas/news/2016/nov/6/more-spending-cuts-as-uae-predicts-oil-shortages-5531344/

    HSBC Global Bank warns 80% of the worlds conventional fields are declining and world oil shortages by 2020

    https://www.research.hsbc.com/R/24/vzchQwb

    UBS Global Bank warns of industry slowdown and world Oil Shortages by 2020

    http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/12136886/Oil-slowdown-to-trigger-supply-crisis-by-2020-warns-bank.html

    German Government (leaked) Peak Oil study concludes: oil is used directly or indirectly in the production of 90% of all industrial goods, so a shortage of oil will collapse the world economy & world governments/democracies

    http://www.spiegel.de/international/germany/peak-oil-and-the-german-government-military-study-warns-of-a-potentially-drastic-oil-crisis-a-715138.html

    The Oil Age may come to an end for a shortage of oil. -Saudi Oil Minister Sheikh Yamani (Friedrichs 2010)

  7. Anonymouse on Sat, 19th Aug 2017 8:57 pm 

    Who needs cloggen-frauds endless nonsense when you got morons that say things like this…

    “Currently, fossil fuels make up 86% of energy use and shockingly enough has been practically unchanged for over three decades, even after the trillions of dollars in investments in alternative sources (solar, hydroelectric, nuclear, wind, and even bio).

    It gets even more alarming when you consider that over 95% of all fuel used for transport comes from oil.”

    The author seems? to be of the belief, that power generated by solar or wind, was supposed to reduce oil usage in transporation…somehow.

    Very little of those ‘trillions’ in investments, were specifically targeted, or ever intended for the single-passenger vehicle segment, or more broady, just vehicles, and they havent-SUPRISE!

    Nor does he bother to mention, even if his 86% figure is totally accurate, what he omits to mention, is the TOTAL amount of ALL energy usage, definitely has increased over the last 3 decades. If, trillions had been spent, and total energy use today was exactly the same as it was 3 decades ago, well, that would be a scandal wouldnt it? He would be quite right to complain if that were the case, and so would everyone else.

    But you know, lies, damned lies, statistics….

    But he managed to got one thing mostly right, ‘bio'(he didnt bother to define his understanding of the term, but w/e), has in fact, been an energy and money sink.

  8. Rockman on Sun, 20th Aug 2017 7:25 am 

    Dredd – “No problemo so long as death and sickness are irrelevant”. With respect to ff consumers it appears to be irrelevant to them. Change their attitude and you can change the situation.

  9. dissident on Sun, 20th Aug 2017 8:42 am 

    Cornucopian drivel is not going away for decades – if ever.

  10. Cloggie on Sun, 20th Aug 2017 9:03 am 

    Cornucopian drivel is not going away for decades – if ever.

    These last two words indicate that in principle you deem it possibles that the “Cornucopians” could in fact be right.

  11. onlooker on Sun, 20th Aug 2017 9:50 am 

    Nothing to celebrate Oil will still exist somewhere in the Earth long after modern Civilization has been relegated to the dustbin of history. Because of EROEI

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