RE: The Party's Over

From: Glenn Morton <>
Date: Mon Apr 12 2004 - 20:54:27 EDT

I have not read the book under consideration. However, I am getting
most of my information from industry sources which are probably as good
as what the authors of books can do. There is an article today in the
Oil and Gas Journal which raises some of the bad issues looming ahead.
The article is "Study World Oil Forecast Beset with Reserves Shortfall,"
O&G Journal, April 12, 2004, p. 28-30

The study by Douglas-Westwood Ltd, a British firm, does say that we will
have peak oil around 2012 or so according to the chart accompanying the
article. They point out that China went through a 75% increase in the
sale of passenger vehicles in just the past few years. This alone
caused a 10% growth in oil demand. They point out that the 2003-2004
oil glut predicted by many failed to materialize. Largely, in my
opinion, this is due to China. And China will continue to drive demand
for the foreseeable future.

The article says

"Smith said that, beyond 2020, the world's known and estimated
yet-to-find reserves and resouces could not support even the current
level of production. And just a 1% growth in global economic activity
would increase demand to the point that a production peak could occur as
early as 2016." p. 30

Now, I have done some calculations to see what it would take to replace
oil with other energies. Natural gas will soon become a major trading
commodity. Oil companies are trying to figure ways to get to the 5000
Trillion cubic feet (TCF) of stranded gas reserves. Right now it costs
more to build a pipeline than one can sell the gas for. But as prices
for energy climbs a large chunk of that will become available. That
represents 900 billion bbls of equivalent energy. This will suffice for
a while--30 years. However, to get that, we have to build lots and lots
of LNG ships and LNG ports--something most people don't want in their
back yard. And we would need to quadruple the present gas
infrastructure in pipelines etc to move that much gas. It will be an
expensive undertaking.

Today the US uses 64 billion cubic feet per day. If we need to
quadruple the capacity and import almost all of that gas (North America
is running out of natural gas), then the numbers look a bit daunting.
There is the Energy Bridge Deepwater Port which is being built in the
Gulf to import 500 million cubic feet per day. We would need 128 of
them. I can't find the cost of this one, but at around $400 million per
port, we are talking some large numbers here.

One could build 4800 1000 Megawatt nuclear reactors to replace oil. But
the questions there concern the cost, which is approximately the gross
national product of the US-- a sum spent on WWII over a 4 year period.
We might be able to do it, but I don't know if there is enough uranium
out there to feed all those expensive monsters. Not to mention the
problems of radioactive waste everywhere.

At the 1996 consumption rate, we have a 200 year supply of coal. But if
you use it at the rate we need to to replace oil, it becomes around a 40
year supply. We will probably fend off the worst of the disasters until
the end of this century. That is good for me and my children, but the
end of my grandchildren's life may be problematic. (My first grandchild
is on the way). It gives us 100 years to solve the fusion problem.
That is really the only long term hope.
Received on Mon Apr 12 20:54:54 2004

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