1. Peak oil will change our world Brendan F.D. Barrett United Nations University
2. The era of cheap oil is over! 150 113US$ 75 38 0 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Nominal Oil Price Real oil price (inflation adjusted) Source: EIA Short-Term Energy Outlook 2011
3. What happens when oil prices spike?
4. US$200: Oil Crunch occurs with severemacro economic impacts.US$150: Food prices rise causing riots inmany developing countries.US$100: Inefficient airlines loose moneyand go bust.US$80: United States economy goes intorecession.
5. The mechanics of oil prices are complex. But one variable wecannot ignore is peak oil.
6. Peak oil is not a theory. It is a physical reality.
7. In 1956 M. King Hubbertforecast that crude oilproduction in the UnitedStates would peakbetween 1965 and 1970.
8. It is generally accepted that he was correct!
9. There is no consensus on the timing of global peak oil.
10. In October 2009, UK EnergyResearch Centre compared500 global oil productionforecasts and identified whythey are different.Download report from:http://www.ukerc.ac.uk
11. Concluded that there is asignificant risk of global oilproduction peak before2020.
12. Why aren’t we more concerned about the reality of peak oil?
13. For many years, it was justretired geologists, like Dr.Colin Campbell, warningabout peak oil.
14. But now global business leaders, like Richard Branson, are very worried.
15. Peak oil could force him out of business.
16. So Virgin joined the UK IndustryTaskforce on Peak Oil & EnergySecurity.
17. Their 2010 report predicts.... “...oil crunch will happen in the next five years...” See: http://peakoiltaskforce.net/
18. Robert Gates, USSecretary of State forDefense, is also worried.He has a nation todefend and a world topolice.
19. He warns that...“every time the priceof oil goes up by 1dollar per barrel itcosts us about 130million dollars.”
20. US Joint Forces Commandstates that by 2015...“the shortfall in [oil] outputcould reach nearly 10 mbd[million barrels a day].”... this will cause majortensions in the world.
21. The US military will...- Introduce 4,000 electricvehicles by 2013.- Power a naval fleet andhalf of all aviation withbiofuels by 2016.
22. Fatih Birol, chief economist atthe International EnergyAgency, says conventional oilproduction peaked in 2006.
23. Until 2008, the IEA tended to make optimistic projections about future oil production levels.Now they warn that we have to find the equivalentof four Saudi Arabias by 2030 in order to keep pace with oil demand.
24. Scenario presented in the World Energy Outlook 2008
25. Revised scenario in the Uppsala World Oil Outlook
26. Oil production levels will remain static or fall.Oil consumption in OECD countries is also falling.Oil demand in non-OCED countries, including Chinaand India, will continue to grow rapidly.
27. Oil consumption in major countries (thousand barrels per day)3000022500 United States15000 China 7500 Japan 0 India 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Source: BP Statistical Review of World Energy 2010
28. Shell warns that...“we are entering an era of volatile transitions...a zone of extraordinary opportunity or misery.”
29. So how will peak oil change your world?
30. Fond farewells:Goodbye cheap package holidayand business air travel.Hello local holiday resort, hello videoconferencing.
31. Fond farewells:Goodbye cheap energy and fuel.Hello less energy waste, morerationing, greater efficiencies.
32. Fond farewells:Goodbye my car (takes 90 barrels ofoil to make one car).Hello electric car share, or publictransport.
33. Fond farewells:Goodbye industrial food system (0.7ltrs of oil to make cheese burger).Hello local, mainly vegetarian,healthy eating.
34. Fond farewells:Goodbye global just-in-timemanufacturing.Hello local jobs.
35. If you own a business then read 2010 report by Lloyds and Chatham House...“Businesses that take advantage of the new energy reality will prosper - failure to do so could be catastrophic.” See: http://www.chathamhouse.org.uk/ﬁles/16720_0610_froggatt_lahn.pdf
36. If you are a policy-maker, readthe 2005 Hirsch Report for the US Department of EnergyArgues that if we do not act untilpeak oil arrives then we will face 20 years of painful economic transition. See: www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
37. Everyone read the Transition Handbook by Rob Hopkins See: http://transitionculture.org/Every community needs anenergy descent plan...and many already have one!
38. The big question is ... can we break free from our oil addiction?
39. Can we make a new globaloperating system(version 2.0) that does not run on oil?
40. Four key scenarios Revolutionary/ MitigationSystemic Change Do Nothing Adaptation (prey for a miracle)
41. Revolutionary/Systemic ChangeWho?: Mark Jacobson (Stanford University), Tetsunari Iida (ISEP), WWFWhere?: Sweden, Germany, CaliforniaLong-term, sustainable solution, but massive social change.100% renewable by specific date (e.g., by 2030 or 2050), phase out fossilfuels/nuclear power.Power down (e.g., reduce energy consumption by 50%) through greaterefficiencies and savings (negawatts).Introduce smart grid, electric vehicle fleet and off-peak power storage(e.g., hydrogen fuel, batteries).Unclear how liquid fuels problem will be solved (unless redirect oil savedfrom electricity generation) or how stable renewable electricity supply willbe.
42. AdaptationWho?: Saul Griffith, Shuzo Nishioka, Low Carbon Society, 2000 Watt SocietyWhere?: Switzerland, China, India and maybe JapanPromote both renewable and nuclear energy, but reduce fossil fuel use.Massive technological innovation (e.g., globally requires 1xGW nuclear plantto be built every week for 25 years, 100 m2 of solar cells every second, etc).Solve climate and energy security challenges at the same time.Maintain existing lifestyles, convenience and services while reducing overallenergy use (i.e. to 1/3 of present levels for Japan, 1/6 of US current levels).Promote equitable solution for developed and developing countries.Ignores nuclear accident risks. Future generations have to solve radioactivewaste problem.
43. MitigationWho?: Robert Hirsch, UK Industry Peak Oil Taskforce, International EnergyAgencyWhere?: US, UK, CanadaToo late to adapt and therefore need emergency measures.Promote administrative measures such as carpooling, telecommuting and fuelrationing.Promote physical measures like fuel-efficient transportation; EOR in existing oil fields;liquid fuels from tar sands, coal-to-liquid/gas-to-liquid operations.Calculate these measures could save 30 million barrels per day.Excludes nuclear and renewables because they only produce electricity, not liquidfuels, and biomass-to-liquids because they require heavy subsidies.Ignores impact on environment and climate (i.e., Canadian tar sands destroyinghuge area).
44. Holmgren’s Four Energy Futures Techno-Explosion Climax (Post-modern cultural chaos)Energy and Resource Use Techno-Stability Population Pollution Industrial Ascent Energy Descent Pre-industrial sustainable culture Collapse Historical Time Future Time Agriculture Industrial10,000 years BP revolution http://www.futurescenarios.org/content/view/16/31/
45. At the United Nations University we launched the Our World 2.0 webzine in July 2008 to explore the transitionto a low carbon, post oil era .
46. Lets work together in promoting this shift. ourworld.unu.edu @ourworld20 /Our-World-20 /UNUChannel