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Economic Impacts of Liquid Fuel Mitigation Options (PDF)
Bezdek, Wendling and Hirsch; MISI and SAIC for The National Energy Technology Laboratory

The world is consuming more oil than it is finding, and at some point within the next decade or two, world production of conventional oil will likely peak. In addition to peaking, there are widespread concerns about the growing U.S. dependence on oil imports from both an energy security and a balance of payments standpoint.

This study considered four options that the U.S. could implement for the massive physical mitigation1 of its dependence on imported oil:

• Vehicle fuel efficiency (VFE)
• Coal liquefaction (coal to liquids or CTL)
• Oil shale
• Enhanced oil recovery (EOR)

Our objective was to better elucidate the implications of the mitigation programs, e.g., the time required to save and produce significant quantities of liquid fuel, related costs, and economic, fiscal, and jobs impacts. We studied crash program implementation of all options simultaneously because the results provide an upper limit on what might be accomplished under the best of circumstances. No one knows if and when such a program might be undertaken, so our calculations were based on an unspecified starting date, designated as t0.

This study builds on one completed by the authors in 2005 which addressed the issue of world oil peaking.2 The current study deals exclusively with physical mitigation options for the U.S. The options analyzed in both studies are consistent and are shown in Table EX-1. Our analysis showed that the mitigation options that we considered can contribute significantly to the saving and production of U.S. liquid fuels, although decades will be needed for significant impact (Figure EX-1) and related costs will be in the trillions of dollar range. The cumulative 20 year impacts of such a massive crash program would be:

• Savings and production of 44 billion barrels of liquid fuels
• Requirement for over $2.6 trillion of investment
• Over 10 million employment years of jobs created
• Total industry sales of over $3 trillion
• Over $125 billion of industry profits
• Over $500 billion in federal government tax revenues
• Nearly $300 billion in state and local government tax revenues

(May 2006)
Follow-up to the Hirsch Report.

Roger Bezdek on the Hirsch followup (text)
Jason Brenno, Global Public Media
Roger Bezdek, president of Management Information Services Inc. (MISI) and coauthor of Peaking Of World Oil Production: Impacts, Mitigation, & Risk Management (the Hirsch report) talks with GPM correspondent Jason Brenno about the followup to the Hirsch report: Economic Impacts of Liquid Fuel Mitigation Options.

JB- What is the purpose for the second report and why was the second report a necessity?

RB- Well, the first report that we completed last year looked at the implications of oil peaking and the necessary mitigation options required and their implications basically for the world. The second report focused more narrowly on the situation in the US and was much more detailed looking at more options and the impact by industry, by employment GDP, implications for occupational and skill requirements and so forth. So, the second report is a much more detailed focused analysis of the costs and benefits.

JB- What is the reasoning behind why this report was requested? Who requested it and why was it requested ?

RB- As we completed work last year for the world situation, the obvious logical question arose, what implications are there for the US? What are the costs and benefits? What are the possibilities? And we talked with various people at DOE at the National Energy Technology Laboratory. It was universally decided that the second report would be useful and necessary.

JB- Do you feel that we have primarily a liquid fuels problem or will this problem also encompass or contribute to an electricity problem and heating problem essentially an energy crisis?

RB- The near-term problem that we are facing is indeed a liquid fuels rather than a quote energy crisis in general. How we react and deal with this near-term liquid fuels problem will determine how we resolve our energy problems in the longer term. But for the next decade or two at least, the primary problem is the demand for liquid fuel which is simply outstripping the supply at available prices. But, of course, what is happening prices are increasing very rapidly and least of all price volatility has been increasing. So, yes what we face immediately and for the next decade or two at least is a serious liquid fuels problem.
(14 May 2006, but just posted on GPM)

Communities Magazine special on "Peak Oil and Sustainability"
Communities Magazine
Jan Steinman & Diana Leafe Christian—Community Survival During the Coming Energy Decline;
Jan Steinman—An Energy Primer: How We Consume Our Ancient Sunlight;
Ethan Genauer—Peak Oil and Community Food Security;
Lydia Doleman and Mark Lakeman—City Repair and the Opportunity of Peak Oil;
Jonathan Dawson—Peak Oil as "Opportunity"?;
Megan Quinn—Helping Friends and Neighbors Prepare;
Guy Prouty—Preparing For A Post-Carbon World: Why I´m Joining O.U.R. Ecovillage;
Patricia Greene—Living the (Almost) Petrol-Free Life
(Spring 2006)

Community Magazines homepage. The issue is print only.

Two articles are online:
Community Survival During the Coming Energy Decline (also at EB)
An Energy Primer

MoveOn.org Prioritizes "Energy Independence"
peakguy, The Oil Drum (NYC)
MoveOn.org, a progressive advocacy organization with over 3 million members, recently held neighborhood meetings to discuss which issues the organization should prioritize in it's 2006 grassroots activities and campaign ads.

In an online poll of it's members on top 3 priorities for the next year, Healthcare just barely edged out Energy Independence by 4,000 votes. And Energy Independence had more than double the votes of Global Warming. I think this shows that Energy Independence (Rather than just environmentalism) is clearly high on the progressive agenda.

Here's what they sent in their email announcement to members: ...

I realize that TOD attracts people from many different political persuasions, but I think we can all agree that this is a major watershed. In the past progressives focused most of their political efforts related to energy on the defense - stop nuclear, stop drilling, stop everything...even the Kennedy clan coming out against off-their-shore wind power. Now MoveOn has a clear mandate to push in a positive direction for energy independence. The risk, which is already evident in their "Oil-free Congress" idea is that scapegoating and name calling are considered "positive action". Another risk is that they fall for some "sounds good, but is completely unrealistic one-shot solution", like "We'll just do it like Brazil on ethanol".

They must realize that, when it comes to the Politics of Oil, the Discourse Must Change

The clear path to energy idependence is to dramatically reduce demand for energy in an economically responsible way that is sustainable and equitable. This means everything from Alan's rail electrification proposal to taxing gasoline to finding ways of using less fossil fuels on the farm. It may even require more nuclear!

And I think the folks over at Daily Kos have produced a pretty good blueprint.
(2 June 2006)

Energy Strategies for the Mining Industry: A Strategic Perspective
Alex Turkeltaub, Resource Investor
CAMBRIDGE, Mass. (Frontier Strategy Group) -- While mining companies understand that oil prices and energy costs have an enormous impact on their bottom line, few companies have focused in a coherent way on both the challenge and the opportunity presented by the current energy price environment to the mining industry.

Neglecting the development of energy strategies will have important consequences for the competitive positioning of mining companies that do not devote executive and Board-level attention to the issue. Simply put, winners and losers in the mining industry over the coming decade will be determined as much by the successful management of the energy challenge as by the replacement of reserves.

... Three key questions in particular should be top-of-mind for senior executives and Boards of Directors:

* What is the appropriate strategy our company must adopt to manage the cost-side of the energy equation in terms of both power sources used for production and potential investments to hedge against rising energy costs?

*Are there opportunities for mining companies to make intelligent investments in energy to create new revenue streams and growth opportunities?

*In the longer-term, how will the mining industry be impacted by trends in the oil sector, and particularly the possibility that world oil production may be peaking, meaning that crude prices above $100/barrel are likely in the near future?
(1 June 2006)

There are no technofixes for Peak Oil
Alice Friedemann, Culture Change
When you read articles that promise renewable energy, go to the library and pore over old Popular Science and Scientific American magazines. You’ll see a lot of Gee-Whiz contraptions that never materialized.

The only information you can trust on matters of science and engineering are peer-reviewed articles in respected journals. And even then you have to be a bit skeptical. For example, the Farrell Science paper on ethanol had to resort to the results of three non-peer-reviewed USDA sponsored papers to come up with a very tiny favorable positive net energy result for ethanol (half of the papers cited).

Here are some books/links to read to understand the technical challenges of various proposed energy solutions...

So grieve, be depressed and frightened, go through the stages of denial and anger, and eventually you will emerge more clear-headed and delighted with the wonderful moments you have every day. You'll appreciate far more how fabulous it is to live at the peak of civilization and stop taking things for granted, and if you're really smart and lucky, be better prepared for the ecological crash ahead.

It’s important to understand the true nature of the situation we’re in so that the best solutions for mitigating the suffering and hard times ahead are adopted. If we believe that some new energy contraption is about to save us, we risk becoming a cargo cult nation, magically wishing for a solution that never seems to fall from the sky.
(3 June 2006)
On the "hard-landing" or "doomer" side of the peak oil spectrum. The article has a link to a good reading list. Friedemann has also written Lessons for California and the U.S. from movie "How Cuba survived Peak Oil" (Culture Change). -BA

BBC scrapes the barrel to stand up peak oil theory
Peter Nolan, thebusinessonline.com
As part of its “Climate Chaos” season looking at global environmental problems, last Tuesday BBC2 aired a documentary titled “If … the oil runs out” But in lieu of rigorous analysis, the programme turned out to be an unimpressive and inaccurate piece of science fiction. It was little more than a soap opera, with a number of interviews with talking heads interwoven with the stories of the people affected by a hypothetical global energy crisis in 2016.

The main characters in this miniature drama-documentary are Americans. The unspoken message, unsubtly applied, appears to be that it’s the Yanks who are to blame. An overweight and badly-dressed couple, housewife Janie and her truck-driver husband, John, are shown trying to adapt as prices escalate from $85 to $160 dollars a barrel, and a society based on cheap oil comes under stress. First there are queues at petrol stations and then outright shortages. Food prices rise. John loses his job. With the SUV unaffordable, the couple eventually have to resort to wheeling their groceries home in a shopping trolley.

...Support for this geological pessimism is not widespread. Industry consultant and author of “The Prize”, Daniel Yergin is dismissive: “This is the fifth time we’ve run out of oil since the 1880s”. Vaclav Smil, an energy historian, points out that “peak oil” forecasters have a long history of unsuccessful forecasts. In 1979 both BP and the CIA pointed to 1985 as the turning point and in 1990, the UN suggested the coming decade would see the peaking of global oil production.

Even though they might have every incentive to set off a panicked scramble among their customers, major oil companies are similarly sceptical. Two oilmen, David Frowd of Shell and Harry Longwell of ExxonMobil, recently travelled to an Irish peak oil conference to rubbish the theory.

The multilateral agencies are similarly unimpressed. The International Energy Agency is content that supplies are adequate, particularly from “unconventional” oil sources such as those in Canada and Venezuela. The European Commission’s study on energy supply and security in January 2004 also took the optimistic view. The UN Intergovernmental Panel on Climate Change, which provides the scientific foundation for the Kyoto Protocol, also comes under attack from peak oil activists for its estimates of energy reserves.

Peter Nolan is energy and environment ­director of Irish think-tank the Freedom Institute
(3 June 2006)

To summarize: "Daniel Yergin.... tar sands... IEA ... unconventional oil sources ... freedom ... market-based solutions."

What's missing: analysis. -BA