Today I will provide the latest on fossil fuels. There are, literally, thousands of scenarios about the future of energy. Who do you believe? An oil company or the Sierra Club? Well, Shell Oil does tend to have a generally progressive view of what is to come, and you can scrutinize their projections to the Year 2100:
- 2019: coal becomes the #1 energy source (the right column shows that petroleum is today #1, but with all those doomsday studies about global warming, coal continues to be, year after year, the resource that increases the most--and, sure, you can blame China and India, but the USA, the Saudi Arabia of both coal and oil shale, can be added to the mix)
- 2024: world population at 8 billion
- 2034: oil production reaches 100 million barrels/day (93 MBD today)
- 2038: natural gas replaces coal as #1
- 2044: world population at 9 billion
- 2060: electricity decarbonized (one scenario)
- 2065: India replaces China as largest consumer of energy
- 2067: solar PV is the #1 energy source and world energy demand reaches peak
- 2072: air travel energy use increases by 500% compared to now (mostly fossil fuel)
- 2090: electricity decarbonized (second scenario)
- 2100: world CO2 emissions are net zero
One disturbing trend is that the world will continue to expand the use of fossil fuels. What about global warming?
It's not on the decision-making radar screen today. Carbon tax? Not for a long time to come. It was a little more than four years ago that my Huffington Post article:
attempted to at least adjust the tax to something called credit (means the same thing, of course) at 5 cents per pound of carbon dioxide.
What has particularly contributed to our economy is natural gas. In 2006, production had declined to 48 billion cubic feet/day. Last year, we produced 65 BCFD. Experts say we have enough for another century. The price has dropped from $13/million BTU to $4. If you owned a natural gas exchange-traded fund, your value would have declined by a factor of three. How do I know this? Guess who purchased more than a few shares?
North Dakota has suddenly become a boom state, for the Bakken shale formation has been tapped to increase production from 100,000 barrels/day in 2008 to 800,000 barrels/day. North Dakota is now the #2 oil producing state (next to Texas), has the lowest unemployment rate at 3.2%, and a budget surplus approaching $2 billion. American ingenuity developed hydraulic fracturing (fracking) and horizontal drilling. Pretty soon the world will be doing this, opening up more resources. However, it turns out that we are, indeed, sitting on most of this previously too expensive to extract fossil resources.
North Dakota has suddenly become a boom state, for the Bakken shale formation has been tapped to increase production from 100,000 barrels/day in 2008 to 800,000 barrels/day. North Dakota is now the #2 oil producing state (next to Texas), has the lowest unemployment rate at 3.2%, and a budget surplus approaching $2 billion. American ingenuity developed hydraulic fracturing (fracking) and horizontal drilling. Pretty soon the world will be doing this, opening up more resources. However, it turns out that we are, indeed, sitting on most of this previously too expensive to extract fossil resources.
But it took a long time, for we passed all these bills to promote in-situ fossil extraction when I worked in the U.S. senate a third of a century ago. In those days, no one talked much about global warming except for a few academic zealots. How right they were.
What happened to Peak Oil? Well, apparently M. King Hubbert's bell shaped curve might not be representative of the reality. He picked the wrong camel: should have been a bactrian, not a dromedary. For the first time in 20 years, the U.S. produced more than 7 billion barrels of oil/day. Production reached a 62-year low in 2008 of 5 MBD, but is projected to reach up to 10 MBD in 2020. The peak is being delayed because the world seems able to pay a lot more for this stuff. Today, that hiccup caused by the second energy crisis has been overcome by technology:
What happened to that bell shaped curve?
So, I guess, Peak Oil has been delayed by at least a few years.
What is hurting is something we suspect, but can only grin and bear:
- the median household income in 2011 was $50,054, down 8% from 2007
- our population is increasing, but the percentage of Americans in the labor force is at a 34-year low, which means there are a lot more people really unemployed than the reports show
- recent college graduates are making 10% less than they did ten years ago
While not good, for inflation marches on, consider that China seems to be at a crossroads regarding their economy, politics and the general environment. Russia is declining. Europe is back into recession. Japan is on the verge of possible collapse. Similarly, growth in India is faltering. On a relative basis, American is doing fine. But what about global climate warming???
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