We in the United States, the Euro-zone, and Japan are already past peak oil demand. Oil demand has to do with how much oil we can afford. Many of the developed nations are not able to outbid the developing nations when it comes to the world’s limited oil supply. A chart of oil consumption shows that oil consumption peaked for the combination of the United States, EU-27, and Japan in 2005 (Figure 1).
We can see an even more pronounced version of this pattern if we look at the oil consumption of the five countries known as the PIIGS in Europe: Portugal, Italy, Ireland, Greece, and Spain. All of these countries have had serious declines in oil consumption in recent years, as high oil prices have impeded their economies.
Oil consumption for the PIIGS in total hit its highest level in 2004, before the decline began. Peak oil consumption by country varied a bit: Portugal, 2002; Italy, declining since 1995; Ireland, peak in 2007; Spain, peak in 2007; Greece, peak in 2006.
Peak demand is very much related to jobs. Peak oil demand occurs when a country is not competitive in the world market-place, and because of this, loses industry and jobs. One reason this happens is because the country’s energy cost structure is not competitive in the world market-place. With the run-up in oil prices starting about 2003, oil is by far the most expensive of the traditional energy sources we have available today. Countries that use a large percentage of oil in their energy mix can be expected to have a hard time competing, because of oil’s higher cost. ( Continue… )
With all the talk about new oil discoveries around the world and new techniques for extracting oil in such places as North Dakota and Texas, it would be easy to miss the main action in the oil supply story: Aging giant fields produce more than half of global oil supply and are already declining as group. Research suggests that their annual production decline rates are likely to accelerate.
The most recent research on giant oil fields has been available since 2009 so it doesn’t attract media attention the way new discoveries hyped by oil company public relations departments do. And yet, that research is far more important to understanding our oil future.
Here’s what the authors of “Giant oil field decline rates and their influence on world oil production” concluded: ( Continue… )
As it looks more and more likely that the Keystone XL pipeline will be rejected, it may actually turn out that the US can develop their own tar sands. Yesterday the Department of Energy unveiled a new technology that can be used to make US oil sands and heavy oil economically viable for refining.
If the new technology proves a success it could encourage a mining boom of shale oil in the Green River Basin in Utah, Colorado, and Wyoming, as well as enable oil companies to extract heavy oil that has been left in oil fields along the North Shore of Alaska and off the coast of California.
Jenny Hakun, a spokeswoman for the DOE’s Office of Fossil Energy, stated that “estimates for the U.S. heavy oil resource total about 104 billion barrels of oil in place — nearly five times the United States’ proved reserves. Although no commercial-scale development of U.S. oil sands or oil shale has yet occurred, both represent another potential future domestic unconventional oil resource.” (Related article: Are Canadian Oil Policies Misguided?)
The problem with heavy oil is that it is too viscous to flow through pipes, and too contaminated with sulphur and heavy metals to be refined. This was traditionally solved by saturating the oil with hydrogen, but this was always too expensive to make the extraction of heavy oil a viable business. This new technology uses alkali metals to extract he heavy metals and sulphur in a much cheaper manner. ( Continue… )
EPA nominee Gina McCarthy says coal a 'significant' energy source (Sponsor content)
In a US Senate confirmation hearing yesterday, Gina McCarthy, President Obama’s pick to lead the EPA, told a Senate panel on Thursday that coal will remain important in the U.S. energy mix and that if confirmed that she will be flexible in applying new pollution rules for coal-fueled power plants.
“Coal has been and will continue to be a significant source of energy in the United States, and I take my job seriously when developing those standards to provide flexibility in the rules,” McCarthy said.
According to a story from Reuters, “Republican Senators John Barrasso of Wyoming and James Inhofe of Oklahoma, among others, quizzed McCarthy about the economic impact of its rules on states that rely on coal as a primary energy source, and about her feelings toward job losses when coal plants close.”
Barrasso said rules that prevent new coal plants from being built and would potentially shut down existing coal plants are already causing “chronic unemployment” in Wyoming.
“I haven’t heard yet any plain statements from EPA –hopefully we will today from this nominee – about the negative health impacts and lives lost from chronic unemployment caused by the EPA policies,” he said. “This is a serious health epidemic and it seems to go unnoticed by the EPA. How many more times will an EPA administrator pull the regulatory lever that will allow another mining family to fall through the EPA’s trap door of joblessness, poverty and poor health,” he said. “Are coal miners no longer heroes to the nominee and the EPA? These people are heroes and they deserve better than they’re getting from the EPA,” Barrasso said.
Coal is mined in 25 U.S. states and is responsible for more than 760,000 jobs in the United States. Wyoming is the largest coal-producing state, followed by West Virginia, Kentucky, Pennsylvania and Illinois.
France finds itself in an interesting conundrum that the oil industry is hoping to take advantage of: The country has banned fracking but is now planning to tap into geothermal energy which requires a process similar to fracking.
In 2011, France banned shale fracking. In February, France’s Environment Ministry awarded two exploration licenses for geothermal energy, which involves drilling deep into the Earth’s crust.
The media has described the oil industry as up in arms over France’s geothermal plans. It’s not fair. Fracking is, after all, fracking. But more to the point, the oil industry likely sees an opportunity here to reverse the fracking ban.
France will have a hard time arguing that geothermal fracking is so much different than shale fracking. The outcome will either be to foster public opposition to geothermal energy plans and sideline this as well, or to advance the shale cause. (Related article: U.S. Game Changing Renewable - Geothermal Power)
And France’s geothermal energy plans are rather ambitious: Not only have they awarded three licenses, but they are reviewing 18 more. At the same time, along with the 2011 ban on shale fracking, the government revoked shale exploration licenses awarded to France’s Total SA and the US’ Schuepbach Energy LLC. ( Continue… )
On paper, the goal of Thursday's Senate Committee on Environment and Public Works meeting was to consider the nomination of Gina McCarthy to head the US Environmental Protection Agency. In practice, it was equally a referendum on the agency's considerable regulatory powers.
What are the costs and benefits of regulating fossil-fuel energy production? Do savings on health and infrastructure outweigh losses in employment and production?
McCarthy has a reputation for being a tough regulator. As head of EPA's Office of Air and Radiation, she helped draft new regulations curbing emissions of mercury and soot from power plants. Just last month the EPA passed stronger standards for car tailpipe emissions and sulphur levels in gasoline. ( Continue… )
Will high natural gas prices increase coal use? (Sponsor content)
In an article from yesterday’s Power Magazine, the magazine states that the U.S. Energy Information Administration (EIA) predicts that coal generation will gain in 2013 due to the rising price of natural gas.
According to the article: “The increasing cost of natural gas relative to coal is expected to increase coal’s share of total generation from 37.4% in 2012 to 39.9% in 2013, according to the EIA April release of its Short-Term Energy Outlook.
Though that would leave coal’s percentage below its 42.3% share in 2011, it indicates that gas may not be on an inevitable path to overtake a significantly greater share of the generation pie.”
Just today, a dedication ceremony was held for the John W. Turk Plant in Arkansas. The 600-megawatt coal-fueled plant began commercial operations in December 2012 and is one of the cleanest, most efficient coal-fueled plants in the United States, and the first of its kind in operation in the United States.
EIA figures also show that coal consumption will increase both domestically and internationally to meet rising electricity demand during the next several decades, providing the U.S. and other countries with indigenous energy resources.
Mr. Obama calls for investing billions in clean-energy technology and eliminating tax breaks for oil and gas companies – two features of the administration's energy policy that have repeatedly rankled Republicans.
"As we continue to pursue clean energy technologies that will support future economic growth, we should not devote scarce resources to subsidizing the use of fossil fuels produced by some of the largest, most profitable companies in the world," the budget reads.
It's like nails across a chalkboard for the oil and gas industry. They say eliminating such tax preferences would kill jobs and slow economic development.
Fisker is certainly in dire straits, but is Tesla really a "loser"?
Both companies were backed by Department of Energy loan guarantees, but the electric carmakers' balance sheets are far from similar. While Fisker teeters on the verge of bankruptcy, Tesla is exceeding sales targets and says it made its first profit in the first quarter of 2013.
RECOMMENDED: Think you know energy? Take our quiz.
That's not to say Tesla's record is spotless. The former governor of Alaska pointed out one of Tesla's setbacks in her post:
"[T]he Obama-subsidized Tesla [turns] into a 'brick' when the battery completely discharges and then costs $40,000 to repair." ( Continue… )
After filing for bankruptcy and seeing its stock fall 40% when it default on $541 million in bonds, Chinese equity Suntech Power Holdings Co. (STP) has rallied on rumors that Warren Buffett may buy the company.
Suntech’s rally brought other languishing Chinese solar companies along with it at it rose 0.4% to 89.44 at the close of trading in New York on 8 April. According to Bloomberg, after falling 40% following the default, Suntech rose as much as 28% after a Hong Kong news service said Buffett’s MidAmerican Energy Holdings Co. might buy the Chinese manufacturer.
No one’s quite sure why Buffett might want to buy Suntech, with all the debt he would inherit at a time when solar prices are low. There has been no confirmation from MidAmerican Holdings that any deal is in the works. (Related article: Solar Industry Finally Producing More Energy than it Consumes)
Chinese lenders signed a bankruptcy petition for Suntech over the company’s debt in excess of $2.2 billion. Suntech continues to produce solar panels, however, further compounding the oversupply problem and forcing more drops in prices.
Solar stocks are extremely volatile right now and unable to deal with the combination of oversupply and declining demand at a time when government subsidies are being slashed.
RECOMMENDED: 8 steps to US energy security