Peak Oil is You
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Page added on June 15, 2016
World fossil-fuel use could peak in 9 years
Probably you’ve heard of “peak oil,” the theoretical point at which maximum pumping of the planet’s oil resources is reached and production begins to decline for various reasons, including rising extraction costs and shrinking reserves.
This is a passionately disputed conjecture, but there is one point of general agreement — the peak has been pushed well into the future by directional drilling and the other advances associated with hydraulic fracturing.
Then there’s “peak coal,” an even more fractious effort to apply the same sort of frame to dinousaur-based fuel in solid form; experts have never been able to agree within even a couple of centuries on when we might arrive at this milepost.
Now we have from the analysts at Bloomberg New Energy Finance a forecast of peak fossil fuel consumption, covering natural gas as well as coal and oil, and determined not just by production costs or available reserves but also by market demand.
And they think it could arrive in, oh, as little as nine years.
A big driver here is the continuing expansion of alternative, renewable energy sources, discussed here just last week in the context, mostly, of electric power generation and the latest analysis from the Renewable Energy Policy Network for the 21st Century, based at the United Nations Environment Programme.
BNEF takes a much broader look in its New Energy Outlook 2016, published Sunday, drawing on a wide range of business and economic data — from public sources — regarding the costs of all fuels and generating technologies (including storage), electricity demand, policy trends and “consumer dynamics.”
Its reports typically receive respectful coverage in the specialist press devoted to energy and climate topics, in part for their transparency and also the credentials of the analyst team.
Fossil prices held lower
A key assumption on the fossil side for NEO 2016 is a 30 percent reduction in predicted average prices for coal and gas through 2040, which should encourage their use. Another is not to count on the Obama administration’s Clean Power Plan surviving court challenges, or all the parties to the Paris agreement on carbon reductions to hit their targets. Nevertheless:
Cheaper coal and cheaper gas will not derail the transformation and decarbonisation of the world’s power systems.
By 2040, zero-emission energy sources will make up 60% of installed capacity. Wind and solar will account for 64% of the 8.6 terawatts of new power generating capacity added worldwide over the next 25 years, and for almost 60% of the $11.4 trillion invested.
Some key components of the outlook:
- Although world oil prices are likely to recover some, and U.S. prices for natural gas will be lifted by rising production costs, coal is a different story.
Seaborne coal … appears to be in structural decline. Coal prices have been falling since their last peak in 2011 and a combination of China’s economic slowdown coupled with developed country emissions regulations, carbon prices, cheap gas and India’s plan to develop its domestic resources leads us to conclude that coal prices will remain low.
- Although natural gas-fired power plants are still discussed as a necessary bridge from coal to renewables, BNEF thinks not so much.
In only a handful of countries do we see material uptake in new gas-fired power is a transition fuel. These include the U.S. where gas capacity grows by 97 gigawatts to 2040 — though the bulk of that happens in the years to 2030.
- Wind and solar power continue to get cheaper as development and installation costs fall and capacity factors — the percentage of theoretical output that is reached in actual use — keep rising. BNEF predicts that the cost of onshore wind power will fall 41 percent by 2040, and utility-scale solar by 60 percent.
Solar’s precipitous cost decline sees it emerge as the least-cost generation technology in most countries by 2030. It will account for 3.7 terawatts, or 43%, of new power generating capacity added in 2016-40 and for over $3 trillion of new investment. Small-scale solar makes up a bit more than a third of this new capacity.
- By around 2027, new wind and solar gets cheaper than running existing coal and gas generators, particularly where carbon pricing is in place. This is a tipping point that results in rapid and widespread renewables development. Repowering of existing wind sites also begins to make up a larger fraction of activity in Germany, Denmark, California and China, accounting for 43 percent of wind development by the early 2030s.
Growing power demand
- Electricity demand will grow worldwide by more than 50 percent by 2040, BNEF’s models suggest, with especially rapid growth in Asia and India; all over the world, a key driver will be a use that so far could be considered marginal — personal transportation. Only 1 percent of new cars bought today are electric vehicles, but
Over the next 25 years, light-duty electric vehicles will provide 2,701 terawatt-hours of additional electricity demand, to reach 8% of world consumption. Our modeling suggests EV’s will make up 25 percent of the global car fleet by 2040, putting continuous downward pressure on battery costs through technology development, economies of scale and manufacturing experience. Cheaper batteries increasingly bring small-scale and grid-scale storage options into play.
- While fossil fuels account for about two thirds of electricity generation worldwide today, BNEF sees them reaching peak use between 2025 and 2027, then falling to a 45-percent share by 2040, with coal’s share falling from 39 percent today to 27 percent in 2040.
We see wind and solar generation rising from 8% in 2015 to 32 percent in 2040 — with around five points of that behind-the-meter, small-scale solar. Overall, zero-carbon sources, including hydro, biomass, nuclear and other renewables, account for 56 percent of total generation in 2040.
So, what does all this mean for climate change? Well, the trend is in the right direction, but we are not out of the deep weeds by a long ways.
The rapid slowdown in Chinese electricity demand growth, weak demand signals from much of the developed world and increasing amounts of renewable energy in our NEO 2016 forecast have combined to slow emissions growth, reducing the abatement required to keep us on track for 2° C. …
To continue on this trajectory, however, we estimate that around 10 terawatts of zero-carbon power generation will need to be installed by 2040, representing a $14.6 trillion investment opportunity over the next 25 years.
This is 56 percent more new capacity than [predicted in the new report], which anticipates $9.3 trillion of new zero-carbon investment or around $373 billion per year.
31 Comments on "World fossil-fuel use could peak in 9 years"
shortonoil on Wed, 15th Jun 2016 6:43 pm
It is convenient when they post their biased ignorance up front.
It makes ignoring most of the rest of the article much faster.
shortonoil on Wed, 15th Jun 2016 6:51 pm
“however, we estimate that around 10 terawatts of zero-carbon power generation will need to be installed by 2040, “
If that wasn’t an unsolvable, non-deterministic equation – I just might believe the author.
Go Speed Racer on Wed, 15th Jun 2016 6:57 pm
Windmills are putting out maybe 6% of the nameplate rating. Or at least that’s something I heard. Cause it don’t blow very much.,,so they lie and quote the max wattage, not the average.
makati1 on Wed, 15th Jun 2016 7:16 pm
Fiction article…not worth reading.
Boat on Wed, 15th Jun 2016 7:20 pm
Go Speed Racer,
Learn how to google.
Plantagenet on Wed, 15th Jun 2016 8:06 pm
Gosh…only 9 more years to peak Fossil Fuels. Of course by then more CO2 will be entering the earth’s atmosphere from thawing permafrost then from FF, so it will be too late to stop global warming no matter what we do.
Cheers!
Dustin Hoffman on Wed, 15th Jun 2016 8:28 pm
Not to mention the hundreds of millions more homo consumptians added to the rolls because moar is better.
No sense in worrying about such things any more….like we had been warned decades ago and stayed the course…right off the edge.
Cheers
Go Speed Racer on Wed, 15th Jun 2016 8:39 pm
What is Google. Can I get that on 8-track tape?
joe on Thu, 16th Jun 2016 5:33 am
No serious government will ever admit that peak oil has arrived. Rome never admitted that when it lost Libya it lost its empire, but thats what happened. Instead theyll just say they dont need it it anymore and wind down the system through time and neglect. Theyll say they don’t need cars because we have the net, theyll say we dont need suburbs because we can distribute resources better in cities finally they wont need a big workforce because ai and robots will do the work.
Its all lies and people will most likley believe it.
rockman on Thu, 16th Jun 2016 7:19 am
As shorty said when they layout mega BS upfront it’s easy to stop reading: “…but there is one point of general agreement — the peak has been pushed well into the future by directional drilling and the other advances associated with hydraulic fracturing.” First, “well into the future” is a meaningless phrase: 5 years…15 years…35 years? Second, hz drilling and frac’ng (as well as the oil potential in the shales being known for years) existed before the US increase. What was lacking was a significant increase in the price of oil/NG…similar to where prices are today.
Not sure if any worthwhile material followed that initial ridiculous propaganda but I doubt it.
Kenz300 on Thu, 16th Jun 2016 9:11 am
Big Coal Funded This Prominent Climate Change Denier, Docs Reveal
http://www.huffingtonpost.com/entry/roy-spencer-peabody-energy_us_57601e12e4b053d43306535e
Solar Added More New Capacity Than Coal, Natural Gas and Nuclear Combined
http://ecowatch.com/2016/06/09/solar-new-capacity/
shortonoil on Thu, 16th Jun 2016 9:56 am
“No serious government will ever admit that peak oil has arrived. “
Whenever one speaks of government, they are talking about bureaucracies. Bureaucracies are no more than large congregations of people who individually have no more capability than the average man on the street. You can meet many of them here every day.
Bureaucracies, because they are composed of a large collection of individuals, will always make decisions that they view as being the most beneficial for them. That is, their determinations will always be biased. They will be driven by the same preconceived notions that are predominate in the general population.
The realization that the oil age is coming to its end; that we are in the final stages of that era is completely out of the frame of reference for the average individual. It is also completely out of the frame of reference for most bureaucracies. If one takes general ignorance, and multiplies it by 100,000 you get general ignorance times 100,000; you don’t get some kind of new enlightenment.
Governments will, by an large, keep marching along on the same course they have set upon, just like most individuals will do. The generally held belief that there are X number of barrels, and so there is no problem there will prevail. Another generally held belief, that the collective mind can solve all problems, has been well conditioned into most. That includes the bureaucracies that make most of the major decisions in our society. Their decisions will be no more enlightened than are the individuals from which it is composed. If one is expecting some White Knight in the form of the EIA, or BLS to wake up, and realize our predicament they are likely to be waiting until it is too late to do anything about it. You will soon find that you have been cast from under the protective cloak of the collective mind. From here on out, the best decisions that can be made will have to be made by you.
http://www.thehillsgroup.org/
efarmer on Thu, 16th Jun 2016 10:21 am
World riding of genetically engineered flying horses could peak in 9 years, or not manifest at all. I myself want a flying unicorn, but will settle for a flying horse and simply get a bridle with a fake unicorn horn attached up high. This is because I am both an optimist and a realist.
shortonoil on Thu, 16th Jun 2016 10:40 am
“Absent a major “black swan event” of some sort, we won’t see that happening in the United States for at least a while yet, but without a doubt we are steamrolling toward a major economic depression.
Unfortunately for all of us, there isn’t anything that any of our politicians are going to be able to do to stop it.”
http://www.zerohedge.com/news/2016-06-16/15-facts-about-imploding-us-economy-mainstream-media-doesn%E2%80%99t-want-you-see
From here on out, the best decisions that can be made will have to be made by you.
Robert Spoley on Thu, 16th Jun 2016 11:40 am
The distant future. Really? Did you know your grandparents? Mine were born in the 19th century. Planes were a marvel to them. The distant future is more like 200 – 300 years. Oil and gas? Not hardly. 15 billion people? Not hardly. I’m guessing more like 2 billion people and thorium reactors. That is sustainable. Although I remain optimistic about my personal life, I try to live in a realistic world and make decisions accordingly.
IPissOnLosers on Thu, 16th Jun 2016 12:47 pm
The peak energy per unit of mass for fossil fuel happened in 2005 at the same time that number of barrels of conventional oil peaked.
Peak energy using real energy unit such as joule or BTU was in 2005.
There is two variable regarding peak oil, the number of barrels and the energy content per unit of mass for each barrels.
Only loser con
Boat on Thu, 16th Jun 2016 3:55 pm
IPissOnLosers,
Prove it. Me thinks you full of pee and blockage. Btu consumption in 2016 is higher than in 2005.
frankthetank on Thu, 16th Jun 2016 5:31 pm
Who cares anymore. Just ride the volcano. Whatever happens, no one here is stopping it. Prepare for the worst, hope for the best and all that crap.
shortonoil on Thu, 16th Jun 2016 6:33 pm
“Prove it. Me thinks you full of pee and blockage. Btu consumption in 2016 is higher than in 2005. “
You are comparing gross energy with net energy. That is like comparing horse shoes to horses. As usual you are trying to confuse the issue by using undefined quantities.
Can I prove it? Yes beyond any reasonable doubt. You can start right here:
http://www.thehillsgroup.org/petrohg10.pdf
Boat on Thu, 16th Jun 2016 9:02 pm
short,
Your information is out dated and incorrect. Here are just a couple of examples.
According to many reports drilling fracking costs have dropped over 30 percent. Who is to say those costs will not drop more.
Refiners on the coast now use nat gas with CHP tech which is cheaper and cleaner and oil gasses which used to be feed stock are now turned into products.
US refiners value fracked oil at it’s price or they would have kept importing that extra 4.5 mbpd. This is not Russia, China or the middle east. They survive on profit.
In fact refiners have done so well cutting costs with fracked oil and cheap nat gas we have become a huge exporter of finished petroleum products. They can import heavy conventional crude, mix it with light fracked oil an do it with more profit than most of the world.
You say demand is dead. Tell that to the 20 million new car and truck owners out of the 85 million sold in 2015.
I could go on and on but your lost in theory instead of the reality in front of you.
IPissOnLoser on Thu, 16th Jun 2016 9:13 pm
Some people should learn to shut their mouth and go back to school. You probably miss some chemistry course.
This is the course you probably miss.
http://galileo.phys.virginia.edu/outreach/8thGradeSOL/FuelEnergyFrm.htm
http://www.engineeringtoolbox.com/energy-content-d_868.html
http://www.eia.gov/todayinenergy/detail.cfm?id=7110
Most people commenting on here are plain stupid and worthless. I hope they will die first.
IPissOnLoser on Thu, 16th Jun 2016 9:23 pm
Crude oils that are light (higher degrees of API gravity, or lower density) and sweet (low sulfur content) are usually priced higher than heavy, sour crude oils. This is partly because gasoline and diesel fuel, which typically sell at a significant premium to residual fuel oil and other “bottom of the barrel” products, can usually be more easily and cheaply produced using light, sweet crude oil. The light sweet grades are desirable because they can be processed with far less sophisticated and energy-intensive processes/refineries. The figure shows select crude types from around the world with their corresponding sulfur content and density characteristics.
http://www.eia.gov/todayinenergy/detail.cfm?id=7110
What it is means is that the net available energy you get after processing light crude is bigger then the net energy you get from processing heavy sour crude.
So indeed net energy available peaked with light crude that correspond to the peak of conventional oil that is 2005.
Kenz300 on Fri, 17th Jun 2016 7:57 am
7 Charts Show How Renewables Broke Records Globally in 2015
http://ecowatch.com/2016/06/03/renewable-investment-broke-records/
Fossil Fuels Vs. Renewables – Citizens’ Climate Lobby
https://citizensclimatelobby.org/laser-talks/jobs-fossil-fuels-vs-renewables/
efarmer on Fri, 17th Jun 2016 9:25 am
I suppose pissing on everyone gives the pisser the self satisfaction that somehow the losers are a subset of the overall target for said pissing. Methinks it is quantum pissing from the Ghawar of urine.
Boat on Fri, 17th Jun 2016 11:20 am
Yo pisser,
“What it is means is that the net available energy you get after processing light crude is bigger then the net energy you get from processing heavy sour crude.
So indeed net energy available peaked with light crude that correspond to the peak of conventional oil that is 2005.”
None of the links you posted showed in any the make up of oil in 2005 or 2016. No api by volume in world consumption. Your pissing in a fan.
Westexasfanclub on Sat, 18th Jun 2016 3:30 am
Could you all please pee and crap somewhere else and focus on that issue which, I think is very important?
There is certainly a before and after regarding 2005, when the conventional plateau kicked in and oil only climbed higher by unconventional production (and accounting alcohol and other liquids, which certainly could be called an accounting fraud).
Me, as a long time bystander here and a layman would like to see you experts digging in that issue without excremental surplus. Thank you!
Kenz300 on Sat, 18th Jun 2016 7:24 am
Fossil fuels are the past……..There are safer, cleaner and cheaper energy sources now……..
Big Oil Could Have Cut CO2 Emissions In 1970s — But Did Nothing
http://www.huffingtonpost.com/entry/big-oil-emissions_us_573c9d81e4b0aee7b8e8a046
Oil Giants Spend $115 Million A Year To Oppose Climate Policy
http://www.huffingtonpost.com/entry/oil-companies-climate-policy_us_570bb841e4b0142232496d97
The Kochs Are Plotting A Multimillion-Dollar Assault On Electric Vehicles
http://www.huffingtonpost.com/entry/koch-electric-vehicles_us_56c4d63ce4b0b40245c8cbf6
MikeX11.2 on Sat, 18th Jun 2016 10:22 am
Very conservative statements.
Solar will be cheaper then all fuels in all countries, by this date.
You can be sure it will happen 5 to 10 years sooner on Most Countries.
makati1 on Sat, 18th Jun 2016 10:27 am
This article should have started out with:
“Once upon a time…”
Davy on Sat, 18th Jun 2016 10:27 am
Mike, do you believe in the possibility of collapse? Maybe not total collapse but significant enough to decimate industrial capacity. This is likely in 5-10 years so your idea of solar prices is unsupported in these scenarios. IOW they are not going to be built in such a scenario becuse the economy is going to be too weak.
Boat on Sat, 18th Jun 2016 11:47 am
Westexasfanclub on Sat, 18th Jun 2016 3:30 am
Could you all please pee and crap somewhere else and focus on that issue which, I think is very important?
There is certainly a before and after regarding 2005, when the conventional plateau kicked in and oil only climbed higher by unconventional production (and accounting alcohol and other liquids, which certainly could be called an accounting fraud).
I have been challenging the idea that tight oil is inferior to conventional oil. I have posted api pricing charts and volume charts separated by api. As a whole tight oil looks to have a competitive edge in the US market.
Tar sands continue to be produced and when mixed with light oil make the same products as heavy conventional oil that also is mixed with light oil.
The argument seems false that how a name (conventional) should attach any importance.
“(and accounting alcohol and other liquids, which certainly could be called an accounting fraud).”
Please explain. Are you talking about biofules? Do you have links that explain other liquids in terms of api, volumes and priceing?