Forget Your Silver Bullet
By Bill Moore
The United States' Task Force on Strategic Unconventional Fuels (www.unconventionalfuels.org) has made public its findings and recommendations on the future role to be played by five non-petroleum energy sources found in America: shale oil, heavy crude, tar sands, coal-to-liquids and enhanced oil recovery (EOR) using captured carbon dioxide.
In three volumes, the Task Force, made up of the U.S. Secretaries of Energy, Interior and Defense, along with the governors of Wyoming, Colorado, Utah, Kentucky and Mississippi, takes a comprehensive look at the potential contribution these, heretofore under-utilized resources can make in supplementing the nation's declining petroleum production. They conclude that even under the most aggressive development scenario, these resources could produce about 7.6 million barrels a day of synthetic liquid fuel by 2035. Ander current, business-as-usual, conditions -- and assuming a whole host of issues from socioeconomic to technical can be resolved -- unconventional fuels might add 2.3 mbld by 2035, about one-tenth of what America currently consumes.
While there are no known proponents of "peak oil" to be found among the senior task force members, nonetheless, Volume One of "America's Strategic Unconventional Fuels" reads as if it might have been produced by the Association of the Study of Peak Oil. There are references to M. King Hubbert and energy return on energy invested (EROI).
The accompanying charts prove equally sobering. The graph (reproduced below) showing oil discoveries from 1930 and projected out to 2029 resembles geologist Hubbert's prescient peak. And a companion graph showing the contributions made by the various unconventional energy sources under three different utilization scenarios shows America continuing to be largely dependent on imported oil with energy conservation and efficiency making greater contributions then unconventional fuels put together.
The Task Force sees the rationale for encouraging the development of tar sands, shale oil, heavy crude, coal-to-liquid and EOR using captured CO2 being driven by declining conventional oil production in America and the uncertain availability of imports, which raises concerns for national security and economic development. They see increasing global competition with China and India, with the former already signing deals that will siphon off oil out of Venezuela and synthetic crude out of Canada, two important sources to the United States. Unless America can supplement and/or reduce its demand through conservation, oil imports are likely to make up 65% of the nation's consumption by 2030.
Troubling from a national security perspective is the heavy reliance of the U.S. military on petroleum, consuming in 2006 some 312,000 barrels of oil a day (Mbl/d) , 218 mbl/d in aviation fuel, 48 mbl/d in marine fuels, 35 mbl/d in ground fuels and 12 mbl/d in heating oils. Increased fuel usage and rising prices has caused the the Defense Department to spend $13 billion in FY 2006, up from the $3.9 billion in 2002. The U.S. Air Force has begun to address the issue by certifying the use of blends of synthetic fuels with conventional petroleum jet fuels (JP-8). The first aircraft to be certified to operate on a 50/50 blend is the venerable, but aging B-52. The Air Force plans to have its entire fleet certified by 2011. The Army and Navy have similar programs in place.
While the Task Force acknowledges that America has vast reserves of fossil fuels, and coal is the 800 pound the gorilla in the room, it also appreciates that there are critical constrains on how much of of these energy sources can be converted to liquid fuel. These include:
- Regulatory or institutional barriers to development,
- Improving technology performance,
- Economically competing with conventional fuels,
- Mitigating adverse socio-economic risks in impacted communities,
- Minimizing water demand, while protecting water rights and quality, and
- Managing carbon emissions and other environmental impacts.
Also highlighted in the study is the acknowledgment that the ultimate amount of energy that can be recovered is not governed by price, but by how much energy it takes to find, recover and refine. Quoting M.King Hubbert, Volume One states:
“So long as oil is used as a source of energy, when the energy cost of recovering a barrel of oil becomes greater than the energy content of the oil, production will cease no matter what the monetary price may be.”
"Simple economics dictates that resources with a negative net energy balance will not be produced. Hubbert suggests that resources with an EROI less than 50 percent will not be pursued, regardless of economic return," says the Task Force.
It indicates that Energy Return on Investment (EROI) on U.S. Oil Shale, for example, is between 6.9 (in-situ, non-electric heat) to 2.5 (in-situ, electric heat) compared to conventional petroleum, estimated at 10.5. Corn ethanol is a miserable 0.34 (Wang).
The implication is clear: the more energy it takes to produce energy, the less likely that source will be produced; and to date, producing shale oil economically -- not to mention environmentally -- has simply not happened despite decades of trying and millions of public and private research dollars.
Not surprisingly, the Task Force identified conservation and energy efficiency as perhaps the most important tools in addressing the growing gap between energy demand and energy produced.
As previously noted, no single fuel source is likely to be adequate to substantially reduce America’s dependence on imported oil. Even with the production of almost 7 million barrels per day of incremental supply by 2035, unconventional fuels development would only slightly reduce the volume of net imports, after offsetting expected demand growth. As such, reducing demand must also be part of the nation’s overall strategy for lowering imports and achieving greater self sufficiency.
The graph from the report illustrates the importance of energy efficiency and conservation compared to the contribution made by nonconventional fuels..
"The most likely place for efficiency gains relative to liquid fuels," continues the report, "is in the individual transportation sector. It is assumed that expected efficiency gains in aircraft, trucks, and industrial uses have already been accounted for in the AEO base case. To achieve this objective the public will need to become part of the solution."
The report lists the following requirements to achieve this:
- Increasing miles per gallon (MPG), through improved engine and vehicle efficiency and consumer choices
- Reducing miles driven, by changing habits, proximity to work, etc and
- Reducing the number of people driving which is a function of total population, carpooling, use of mass transit, etc.
To achieve the needed reductions from conservation, the Task Force identified important strategies that will involve profound changes in America's automobile culture.
Reducing net miles driven by 20% in 30 years for the moderate case and by 30% in the accelerated case is done by a combination of car pooling, mass transit (electric powered), telecommuting, and reversal of the commuter culture (jobs closer to homes, or more urban living).
We're going to have to park our cars, share rides, move closer to our jobs and abandon suburbia, reversing more than half a century of the "American Dream."
Are you ready?
Finally, while the report talks about the economic benefits that result from creation of all these new jobs and infrastructure, it spends virtually no time discussing the environmental impact of extracting these fuels, simply leaving the question to be resolved by technology, as if moving mountains, consuming vast amounts of energy while polluting the air and water (both surface and ground) is hardly worth worrying about. Absurdly, it can quantify the economic benefits of nonconventional fuels while ignoring the environmental costs. It advocates cutting red tape to expedite development of the technology and exploitation of the resources, while paying mere lip service to analyzing the consequences of this headlong rush into the dirtiest fuels.
At least the Task Force was forthright enough to admit nonconventional fuels won't be a silver bullet. We are going to have to change how we live and that isn't going to be easy for a bunch of oil addicts.
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