Saturday, December 15, 2007

Sorry for the Silence............

My apologies for the lack of new material and the lack of approving your messages for the last several weeks. I blew my modem a few weeks back and was without connection to the internet until now.

But I'm back............

In fact you will see a new article "Will Tar Sands Peak in 2015?" that has been written and patiently sitting on my computer waiting for me to get reconnected.

For those of you who may have thought I had disappeared for good, no such luck. I'll be here whining and bitching and complaining about our energy myopia for as long as I can.

The time away wasn't a total waste, however. Deprived of the internet I managed to get some much needed work done on my next book.

Thanks for your patience.

Richard Embleton

Will Tar Sands Peak in 2015?

OPEC continue to warn the industrialized nations that their assumptions are overly optimistic about how much the OPEC members will be able to ramp up production to meet demand over the coming decades. It seems the industrialized nations, or more specifically the U.S. DOE, are guilty of the same effusive optimism when it comes to the ramp-up potential in Canada's tar sands. At least one well respected analyst, Chris Skrebowski, long time energy professional and editor of the British-based Petroleum Review, believes the tar sands production will peak in 2015-2020 at 3 million barrels a day or less.

In the wake of a period of tumultuous energy problems originating in Russia's erratic supply policies (they seem intent on using energy as a political weapon) and their current and future impact on Germany, that country's Energy Watch Group recently released a report on their current projections for world energy - and particularly world oil - trends into the short- and medium-term future. One of the key points in that report was a projection that Canada's tar sands production would be up to a level of 4-million barrels a day by 2030.

Canada's NEB (National Energy Board), in fact, suggest that if oil prices stay high it could reach 5-6 million barrels a day by 2030. Energy analyst,Chris Skrebowski, takes issue with such projections. He finds even the EWG projection of 4-million b/day overly optimistic and in an interview with Julian Darley of GPM (Global Public Media) he explains why, in his expert and considered opinion, the tar sands production will peak in 2015-2020, well below that EWG projection. Julian Darley noted that Skrebowski's 2015-2020 date is "dramatically earlier than almost anybody puts it at." Skrebowski reminded him that since the tar sands projects started in the richest central section "we do know, in general terms, that we always will get leaner."

Recent Canadian news reports seem to suggest that Chris Skrebowski is probably more right than wrong. A November, 2007 Toronto Globe and Mail article titled High costs trim forecast for oil sands production suggests that the NEB (National Energy Board) is now projecting a maximum production level in 2015 of only 2.8 million b/d, 200,000b/d lower than their own commonly used 3-million, because of industry discomfort with capital and operating cost overruns of up to 100% on all current tar sands projects. Assuming that Chris Skrebowski is right about peaking in 2015-2020, that suggests tar sands production will never be ramped up beyond 3-million b/d.

What is the real situation with the tar sands? How can there be such a disparity in the estimates for future tar sands production?

In his interview with Julian Darley, Chris Skrebowski highlighted several challenges for the tar sands industry over the foreseeable future. Three that may or may not be soluble are;
* the availability of the high volumes of water needed for tar sands processing,
* the availability of gas or alternative means of heating the tar sands. Greg Stringham, a vice-president of CAPP (the Canadian Association of Petroleum Producers), said the gas price used by the NEB for its main forecast – $7 per million BTU – is on the pessimistic side. "It would be too low to support investment in high-cost unconventional and tight gas projects and not high enough to reduce demand," he said.
* and; how vigorously the various levels of government choose to legislate and enforce environmental controls. Various parties, from the municipality of Fort MacMurray to a host of environmental organizations have called for a moratorium on new projects until environmental impact studies can be completed. Canadian governments have a dubious track record of allowing major projects to proceed before the required environmental assessments are completed only to find, when the studies are done, that they should have blocked the project. Having approved the go ahead they leave themselves with no option but to allow the project to continue.

The one challenge that Chris Skrebowski sees as insoluble, as it is a limit of geology, is that the tar sands have a wide variability in quality. Current operations are being conducted in the bitumen-rich central area of the tar sands deposits. Bitumen, not oil, is what the tar sands hold. It is a thick, tar-like substance which needs further, energy-intensive processing, after the energy-intensive extraction, to be converted into a synthetic liquid crude. In the central areas the tar sands contain about 12 percent bitumen, up to 14% in a few sweet spots. At that level of bitumen concentration tar sands oil production is economically profitable and also has a slightly positive EROEI for strip mining operations. Even in these areas, however, in situ production - which involves injecting steam into the tar sands to separate the bitumen from the sand so it can be pumped to the surface like crude oil - thus far has a negative EROEI because of the higher energy requirements and also because the bitumen concentrations, due to higher levels of biodegradation, are generally lower deeper in the tar sands deposits where in situ has to be used.

As the central areas currently being exploited are worked out, which Chris Skrebowski projects they will be by 2015-2020, operators will have to move out of these central areas into the periphery of the reserves. That is where the problem is. In these peripheral areas Skrebowski suggests the bitumen content drops off to about 8 percent. He sees an open question whether operations will continue to be profitable and have a positive EROEI at these much lower bitumen concentrations.

Skrebowski, in fact, may be optimistic. Several studies, including one called PHOTON conducted specifically for the tar sands industry by the University of Calgary, have found that bitumen concentration in a reserve varies considerably both vertically in the reserve but also across the reserve. That variability ranges from under 5 percent to a high of 13-14 percent. Outside of the central areas currently being exploited, however, the bitumen concentration is consistently under 10 percent even in shallow strip-minable sections.

Analysis of the Utah "tar sands", by comparison, which are really hard shale, not pliable sands, has also showed that their content may be as low as 3-5 percent (the Orinoco tar sands in Venezuela have a bitumen concentration of only up to about 10 percent). This suggests that, from an EROEI perspective, the Utah tar shale could never be exploited economically unless..... the U.S. government decided they were critical and lavished huge subsidies on any organization prepared to exploit it "in the interest of national security". The same, of course, can be said of Canada's tar sands. If they are deemed crucial to North American or U.S. energy security organizations may be financially encouraged to continue their exploitation whatever the cost. Dick Cheney's NEPDG (National Energy Policy Development Group) described Canada's tar sands as "a pillar of sustained North American energy and economic security."

At some point in the foreseeable future Canada's domestic energy needs and U.S. Energy policy are headed for an inevitable clash. Canada's conventional oil production is already in decline and will continue to decline. Natural gas production is barely holding despite an unprecedented amount of drilling in the last couple of years. And Canada's domestic energy needs are growing at 3-4% per year. It is a worrying prospect for Canadians as energy sovereignty was effectively surrendered under the NAFTA agreement. Canada's energy resources must, under the agreement, be open and accessible to corporate energy interests. To date, four of the five oil majors (Royal Dutch/Shell, ExxonMobil, ChevronTexaco, and TotalFina) have invested or committed themselves to invest billions of dollars in tar sands development. National oil companies have also staked their claim, ranging from Norway's Statoil to China's Sinopec.

Whether strip mining or in situ processing is used in the exploitation, however, using tar sands as a source of oil is an unquestioned environmental disaster. And the oil majors have a very poor environmental track record in almost every area of the world in which they operate. Oil derived from tar sands causes greenhouse gas emissions (because of the high energy use, particularly natural gas cooking of the bitumen) 3-4 times higher than conventional liquid crude extraction. But sixty-five percent of the world's oil, it is estimated, is contained in tar sands, not as liquid crude. If governments continue to see oil as critical to their national interests and a key underpinning of their national economy and the global economy, they may still choose to continue to try to keep the wheels on the runaway train by exploiting the widespread tar sands deposits of various descriptions and quality wherever they can be found. Over seventy countries contain tar sands deposits including the U.S.A., Venezuela, Russia, Cuba, Indonesia, Brazil, Trinidad and Tobago, Jordan, Madagascar, Colombia, Albania, Romania, Spain, Portugal, Nigeria and Argentina. Within the United States, oil sand deposits occur mainly in Utah, Alaska, Alabama, S.W. Texas, California, Kentucky, Oklahoma, and Missouri with scattered deposits in other states. None of these other areas equals Canada's tar sands for volume or quality however.

The Canadian region defined as "the Athabaska tar sands" covers an area over 140,000km2 of once virgin boreal forest, a larger area than the state of Florida. It is estimated to hold an equivalent 1.7 trillion barrels of oil or more. But of that only 150-200 billion barrels (about 10 percent) may be recoverable "with today's technology and under current and anticipated economic conditions". But with "the cost of adding a new b/d of synthetic crude production capacity in the oil sands now rang[ing] between $80,000 and $100,000", as per the National Energy Board, that could require additional capital investment of $300-500 billion (currently about $100 billion of further investment has been scheduled or committed) to ramp up to the "desired" production levels of 3-4 million b/d, let alone the optimistic and probably unachievable 6 million b/d suggested as possible by the NEB. As capital costs keep rising exponentially, even that cost of $100,000 per b/d is likely on the low side for future projects, particularly if they are in situ operations or are operations in the peripheral, bitumen-poor areas of the reserves.

On top of escalating capital costs the tar sands industry is also running into severe unanticipated operating costs due to shortages of manpower and equipment, high infrastructure and equipment maintenance costs due to the climatic extremes under which they operate, increased royalty demands from the Alberta provincial government and a host of other costs. With the experiences in Canada's tar sands as a model, the most advanced and successful tar sands exploitation to date in the world, it is reasonable to wonder to what extent governments and energy corporations will be willing to gamble the huge sums needed to undertake similar developments in other areas of the world.

The NEB continues to stick with the belief that the market price of oil will drive tar sands production, seemingly ignoring the EROEI return issue. In their view, "If oil prices – now nudging $100 (U.S.) a barrel – remain high, Canada's crude output could rise to almost six million b/d by 2030, of which five million b/d would come from the oil sands," the NEB report, entitled Canada's Energy Future, states. "Conversely, if oil prices fall to around $35 a barrel, Canada would only produce about three million b/d of crude by 2030, and only 2.7 million b/d of that would be from the oil sands."

Tar sands are not an environmental problem, however, just because of the high greenhouse gas emissions. As the article America's Claim on Our Tar Sands puts it, "The magnitude of the environmental risks and liabilities arising from Canada's tar sands rush is unprecedented in the history of North American energy production. Growing awareness about the global warming and environmental consequences of relying upon growth in tar sands production throws into sharp relief the perils of our addiction to oil in the 21st century."

Everything about the tar sands is big, most significantly, but not only, its global warming and environmental implications -- leading some to now describe the tar sands as "Canada's dirty secret." The tar sands mines are each as big as 150 square miles and may be 300 feet deep, each leaving a tremendous scar on the landscape. Depending on the bitumen concentration, 4-6 tons of material must be moved and processed for every barrel of synthetic crude produced. Over 80 per cent of the established tar sands reserves are deeper and must be extracted in situ. Reclaiming and cleaning up the land damaged by tar sands operations will be a monumental task. According to the paper The Harm the Tar Sands Will Do, "after 40 years of mining, not a single operation has received a reclamation certificate from the government of Alberta. Suncor Energy's operation, the longest-operating tar sands mine, says it has reclaimed 858 hectares of land since starting operations in 1967, less than nine per cent of the land its operations have disturbed to date. Syncrude Canada, the largest daily producer of tar sands, says its operations have disturbed 18,653 hectares since 1978, with just 4,055 hectares of land reclaimed. None of this reclaimed land has been certified as such. At best, reclamation of the tar sands region will be a large-scale experiment that is unlikely to restore a self-sustaining boreal forest ecosystem within the next century."

Water usage is the other major environmental problem with the tar sands. Even at 12% bitumen concentration, tar sands mining operations (in situ operations use even higher volumes) withdraw two to 4.5 barrels of fresh water from the Athabaska River for every barrel of oil they produce. Current operations, to achieve about 1 million b/d production, are permitted to withdraw more than 349 million cubic metres of water per year, a volume equivalent to the amount required by a city of two million people. But unlike city effluent waters, which are treated and released back into the river, tar sands mining effluent becomes so contaminated that it must be impounded in huge, man-made containment ponds. Water withdrawals for tar sands surface mining operations pose threats to both the sustainability of fish populations in the Athabasca River (which is already turned brown from the pollution from seepage from the containment ponds and various spills and is too contaminated to be used for community water), and to the sustainability of the Peace-Athabasca Delta (until now one of the last unspoiled delta regions in the world), jeopardizing the subsistence and commercial fisheries of local aboriginals.

Based on the environmental destruction being wrought by tar sands operations it is to be hoped that Chris Skrebowski is right in his belief the tar sands will peak by 2015-2020. It must then be further hoped that when the economic viability disappears the operators will quietly and discretely fold their tents and slip away, that governments don't continue to financially encourage their exploitation with massive subsidies. Those hopes may be unrealistic in view of the belief of the current U.S. administration under George Bush and Dick Cheney that they are critical to U.S. economic and energy security. With the short time they have left in office there is little to celebrate in the pending change in administration. None of the potential future presidents seem to be intent on changing the country's energy direction or policies. Perhaps in the remaining months of the presidential race one of them will take the energy bull by the horns and inject some sanity into the country's energy policies. Yeh, right!


Sources and additional material;

Chris Skrebowski on alarming new peak oil report
America's Claim on Our Tar Sands
The Harm the Tar Sands Will Do
Pour-point depression of crude oils by addition of tar sand bitumen
Oil Sands
Oil (Tar) Sands
Strip Mining for Oil in Endangered Forests
Athabasca Tar Sands
Tar Sand
High costs trim forecast for oil sands production
Heavy oils and tar sand(HOTS) fluid research at Calgary.
Reservoir and Bitumen Heterogeneity in Athabasca Oil Sands

Tuesday, November 13, 2007

The Human Cost of Bio-Fuels

What is so terrible about bio-fuels? Why should I be opposed to them? Bio-fuel advocates, after all, tell us they are a green solution to the global warming crisis brought on by our profligate use of fossil fuels by reducing our greenhouse gas emissions. Honest research using full energy accounting has proven that to be blatantly untrue. An article entitled The Hidden Agenda behind the Bush Administration's Bio-Fuel Plan by F. William Engdahl says, in fact, "This year the Massachusetts Institute of Technology issued a report concluding that using corn-based ethanol instead of gasoline will have no impact on greenhouse gas emissions, and would even expand fossil fuel use due to increased demand for fertilizer and irrigation to expand acreage of ethanol crops."[15] And in an article titled Biofuels: The Five Myths of the Agro-fuels Transition, Eric Holt-Giménez, a Traveling Professor with the International Honors Program (IHP) at Boston University, writes, "Every ton of palm oil produced results in 33 tons of carbon dioxide emissions—10 times more than petroleum. Tropical forests cleared for sugar cane ethanol emit 50 percent more greenhouse gasses than the production and use of the same amount of gasoline." And in response to the constant assurances that bio-fuels will not take land suitable for food production out of service, and that bio-fuels will not cause harm to the environment, Holt-Giménez adds, "Proponents of agro-fuels argue that fuel crops planted on ecologically degraded lands will improve rather than destroy the environment. Perhaps the government of Brazil had this in mind when it re-classified some 200 million hectares of dry-tropical forests, grassland, and marshes as “degraded” and apt for cultivation."[16]

On the simplest level, in our overpopulated world, the generation of bio/agro-fuels is turning the food needed by the poor of the third world into fuel for the cars and SUVs and Hummers of the industrialized world's wealthy. Even if it is being produced from crops not consumed by humans, "It is a crime against humanity to convert agricultural productive soil into soil which produces food stuff that will be turned into biofuel," says Jean Ziegler, the U.N. special rapporteur on the "Right to Food". Ziegler argues, "[UN] member states should ensure that biofuels are produced from non-food plants, agricultural wastes and crop residues."[2] But in a method of organic, sustainable agriculture, which the world will soon have to revert to as the fossil fuels used to produce pesticides and fertilizers go into serious decline, is there really such a thing as "agricultural waste and crop residues?" They are part of the post-carbon fertilizer on which farming will rely. But Eric Holt-Giménez makes the point in Biofuels: The Five Myths of the Agro-fuels Transition that "The issue of which crops are converted to fuel is irrelevant. Wild plants cultivated as fuel crops won’t have a smaller “environmental footprint” because commercialization will transform their ecology. They will rapidly migrate from hedgerows and woodlots onto arable lands to be intensively cultivated like any other industrial crop—with all the associated environmental externalities."[16]

The amount of food grain it takes (I.E. 450 pounds of corn for ethanol) to produce the fuel for just one bio-fuel fill-up of that 25-gallon SUV tank is enough to feed one person for a year[1]. Even in these early days of the bio-fuel transition, over the past several years the global emergency food grain reserves have shrunk from a marginal 120-day supply to a critical 57-day buffer. It is estimated that, with the diversion of food grains to bio-fuels, even without a significant Northern Hemisphere grain crop failure (an increasing potential due to global warming), those reserves will have completely disappeared by the end of this decade.

For the first time in modern, hydrocarbon history we are able to measure precisely how many lives it costs to fill the tank of the SUV week after week after week. The deaths in the oil wars in the middle east and Africa and from the environmental destruction wrought by the oil companies in third-world countries cannot be quantifiably linked to an individual's personal fuel usage. Bio-fuels, like crude oil, arrive at our shores and gas stations at a tremendous cost in blood and human lives. Unlike with oil, that cost can be quantified. With a weekly bio-fuel fill-up, each year of driving just one SUV (requiring 11.7 tons of corn) would cost the lives of fifty-two people in the third world from starvation, assuming it takes a full year of starvation to kill. I'm certain modern science could nail that down precisely as well.

President Bush has called on his country to produce 35 billion gallons of renewable fuel a year by 2017.[1] That would require, each year, the food grain sufficient to feed 1.4 billion people (every gallon requires 18 pounds of corn). And that would only satisfy 10% of America's liquid fuel needs. Even in 2005, global ethanol production was 9.66 billion gallons (enough to feed 386,400 people), of which Brazil produced 45.2 percent (from sugar cane) and the United States 44.5 percent (approximately 4.3 billion gallons) (from corn). But six billion gallons of ethanol are needed every year in the U.S. just to replace the fuel additive known as MTBE (which itself is made from the food grains rapeseed (canola) and sunflower seeds), which is being phased out due to its polluting effects on ground water aquifers.[1]

For those naysayers who have been sitting back demanding evidence, it is difficult to imagine what more evidence they should need. We can quantify the cost in human lives of our efforts to keep the oil-depletion wolf from the door by substituting bio-fuels to get a few extra years of happy motoring. On the back of the sales receipt printed out at the gas station there should be required to be a picture of the emaciated person who has just died in order to pay for that fill-up, like the graphic health-warning pictures now printed on cigarette packs. Sooner or later we must personally face the consequences of the lifestyle choices we make, especially when those consequences can be so clearly measured in the loss of human lives.

Even now while there is still some meagre emergency food grain reserve left, the poor in the third world are, according to UN FAO and WHO statistics, dying at the rate of up to 40,000 each day from starvation, malnourishment and other nutrition related diseases. With the mad rush to bio-fuels the poor are getting priced out of the market for the very food they need to survive. "Hunger," said Amartya Sen, Harvard Economics professor, "results not from scarcity, but poverty."[16] But poverty is relative. It is written in the wealth and income disparity between the industrialized world and the third world. And it is a disparity that grows at a rampant pace with the wholesale wealth and resource transfer from the already deeply impoverished third world to the increasingly rich nations of the industrialized world. The World Bank has estimated that in 2001, 2.7 billion people in the world were living on the equivalent of less than $2 a day.[1] That number has now risen to over 3 billion. Those studies also suggest that caloric consumption among the world's poor declines by about half of one percent whenever the average prices of all major food staples increase by one percent. Those poor are already struggling to survive at a nutrition level at or below the minimums established by the WHO.

Much of the current acceleration in that disparity, and the increasing third world hunger that results from it, is a direct bi-product of the ill-advised and misleadingly-promoted bio-fuel revolution in the industrialized world. Several studies by economists at the World Bank and elsewhere suggest that the number of food-insecure people in the world rises by over 16 million for every percentage increase in the real prices of staple foods. That means, they suggest, that 1.2 billion people could be chronically hungry by 2025.[1] But those numbers are extremely conservative.

Agro/bio-fuels have become profitable because of rising oil prices and massive government subsidies and a lot of distorted pricing for different forms of energy. It is estimated that, even with the subsidies, bio-fuels could not be competitive at oil prices below $30.00/bbl. But, says the article How Biofuels Could Starve the Poor by C. Ford Runge and Benjamin Senauer, "If oil prices remain high -- which is likely -- the people most vulnerable to the price hikes brought on by the biofuel boom will be those in countries that both suffer food deficits and import petroleum. The risk extends to a large part of the developing world: in 2005, according to the UN Food and Agriculture Organization, most of the 82 low-income countries with food deficits were also net oil importers. ..... In late 2006, the price of tortilla flour in Mexico, which gets 80 percent of its corn imports from the United States, doubled thanks partly to a rise in U.S. corn prices from $2.80 to $4.20 a bushel."[1] Much of the impact on the poorest countries will be more than just price but also the availability of food aid. As Thalif Deen points out in his article Food to Biofuels a "Recipe for Disaster", "Since Washington donates the majority of its food aid in-kind (direct transfers of food commodities), increased biofuel production on American farmland will invariably affect levels of U.S. food aid contributions," Mittal added. Already, the amount of corn contributed as food aid has been steadily sinking and as more farmland is devoted to biofuels, U.S. food aid contributions are predicted to drop further, she warned."[2]

World grain prices (grain is the most basic of those basic foods) rose 100% over this past 12 months alone.[15] Looking very conservatively at a broader basket of grains and seeds, and minimizing the impact of bio-fuels, global corn prices will increase by a further 20 percent by 2010 and 41 percent by 2020. The prices of oilseeds, including soybeans, rapeseeds (canola), and sunflower seeds, are projected to rise by 26 percent by 2010 and 76 percent by 2020, and wheat prices by 11 percent by 2010 and 30 percent by 2020. In the poorest parts of sub-Saharan Africa, Asia, and Latin America, where cassava (also known as manioc) is, most importantly, a staple of last resort for 200-million of the poorest of the poor, if it is used to produce bio-fuels (it is "of interest" because it has a high sugar/starch content) its price is expected to increase by 33 percent by 2010 and 135 percent by 2020.[1] The International Food Policy Research Institute has estimated that the price of basic food staples will increase in real terms by 20-33 percent by the year 2010 and 26-135 percent by the year 2020. That will have a tremendous impact on the caloric intake of the poorest in the third world. They estimate that even now 824 million people continue to go hungry.[16] If basic food prices increase by 135% by 2020 that would place 2-3 billion additional people in the food-insecure category, most of the underdeveloped and developing world. At the same time it will have a significant ramp-up effect on that statistic of 40,000 nutrition related deaths per day.

There were 110 ethanol refineries in operation in the United States at the end of 2006, according to the Renewable Fuels Association. Many were being expanded, and another 73 were under construction.[1] But America is not alone in the frantic pursuit of bio-fuels. It seems to be being seized on by every government and trading block in the world. In 2005, the European Union produced 890 million gallons of biodiesel, over 80 percent of the world's total. The EU's Common Agricultural Policy also promotes the production of ethanol from a combination of sugar beets and wheat. Brazil has mandated that all diesel contain two percent biodiesel by 2008 and five percent biodiesel by 2013.[1] This all appears to be wrapped up in a recognition of (but not an admission to) peak oil and soon-to-be declining global oil reserves. And, of course, those developing countries (can you spell "China" or "India"?) are to blame. According to the U.S. Energy Information Administration's latest laughable projections, global energy consumption will rise by 71 percent between 2003 and 2030, with demand from developing countries, notably China and India, surpassing that from members of the OECD (Organization for Economic Cooperation and Development) by 2015.[1]

Bio-fuels are rapidly turning into the latest golden goose for wealthy agro-business firms, like Cargill and ADM (nearly half of ADM's profits have come from products that the U.S. government has either subsidized or protected), and energy companies alike. In 2006, ADM was the largest producer of ethanol in the United States: producing more than 1.07 billion gallons. Despite huge profits for those involved in bio-fuel production, the U.S. government continues to heavily subsidize both corn farmers and ethanol producers. Direct corn subsidies equaled $8.9 billion in 2005. And the federal government already grants ethanol blenders a tax allowance of 51 cents per gallon of ethanol they make, and many states pay out additional subsidies. In addition, most ethanol currently imported into the United States carries a 54-cents-per-gallon tariff, partly because cheaper ethanol from countries such as Brazil threatens "poor" U.S. producers like ADM. It, of course, has nothing to do with the fact that sugar-cane ethanol has a marginal positive EROEI while corn-based ethanol has a negative EROEI. Cellulosic ethanol would have an even better EROEI except for the high transportation costs involved if the wood products came from wild stands of trees and not wood plantations. Despite already high government subsidies, Congress is considering lavishing more money on primarily corn-based biofuels. Legislation related to the 2007 farm bill introduced by Representative Ron Kind (D-Wis.) calls for raising loan guarantees for ethanol producers from $200 million to $2 billion.

Insidiously, not content with turning food needed by the third world into SUV fuel, the governments of the industrialized nations and their agro-business partners want the third world to use their scarce food-producing land to produce the bio-fuel crops to be used to make bio-fuels. In his article, Biofuels: The Five Myths of the Agro-fuels Transition, Eric Holt-Giménez says "OECD countries are looking to the Global South to meet their fuel demands. Southern governments appear eager to oblige. ..... In Brazil—where fuel crop acreage already occupies a land area the size of Netherlands, Belgium, Luxembourg and Great Britain combined—the government is planning a five-fold increase in sugar cane acreage. Their goal is to replace 10 percent of the world’s gasoline by 2025."[16] The bio/agro-fuels marketing pitch to the third world goes something like "If peasant farmers in developing countries could become suppliers for the emerging [bio-fuel] industry, they would benefit from the increased income."[1] But the history of industrial demand for agricultural crops in these countries suggests that large producers tied to global agro-businesses like ADM and Cargill will be the main beneficiaries. Holt-Giménez goes on to add, "Behind the scenes—and under the noses of most national anti-trust laws—giant oil, grain, auto and genetic engineering corporations are forming powerful partnerships: ADM and Monsanto, Chevron and Volkswagen; BP, DuPont, and Toyota."[16] Two of the primary crops used for bio-fuel production, soybeans and especially corn, are row crops that contribute heavily to soil erosion and water pollution and require large amounts of fertilizer, pesticides, and fuel to grow, harvest, and dry. Those "peasant farmers" simply don't have the financial resources to get involved in these crops. Of course the agro-business giants, or those newly formed partnerships above, would be more than happy to assist them, for a modest price.

If the assistance came not from the business world but in government to government financial support, targeted for agricultural development, coupled with balanced trade policies, there may be a benefit to the poor, small-scale indigenous farmers. But, at present in the area of biofuels, the problem is both restrictive tariffs and heavy subsidies in rich countries, which drive up food prices and limit export opportunities for efficient developing country producers. Agriculture in Sub-Saharan Africa, studies show, employs 65 percent of the labor force and generates 32 percent of GDP growth. According to the report, however, the share of official development assistance going to agriculture in developing countries is a mere 4 percent, far short of the 11-14 percent share of national budgets invested in agriculture that fueled the Asian green revolutions. According to the WDR, for the poorest people, GDP growth originating in agriculture is about four times more effective in reducing poverty than GDP growth originating outside the sector.[3]

The complicity of the U.S. federal government and the large multinational agro-business companies in pushing the ethanol/bio/agro-fuel agenda is blatantly obvious. The motive, of course, is simple. Having little luck and bearing tremendous cost in trying to control that portion of "America's oil" that is under the ground in other countries, the federal government is again singing the "energy independence" song, only this time on the back of bio-fuels. But it is doing so, in partnership with agro-business, using a carefully orchestrated campaign of biased studies, disinformation, misinformation. misinterpretation, misrepresentation and outright lies.

From the report Salazar: "Everyone Benefits From A Strong, Smart Farm Bill" we see a classic case of disinformation and misdirection. "The Farm Bill takes the next step, helping farmers and ranchers take advantage of renewable energy technologies that have been developed at places like the National Renewable Energy Lab in Golden, Colorado. With the $1.3 billion that this bill devotes to energy programs, farmers will be able to apply for grants to develop bio-refineries and to improve the handling, harvest, transport and storage of feedstocks for biofuels. The bill includes tax credits for small-wind turbines and cellulosic biofuel production. And it stimulates research into the methods and technologies that will allow the most productive lands in the world [so much for not having an impact on land that could produce food] to provide more and more of our energy. Our farmers and ranchers want to be a part of the solution – helping reduce the amount of oil we import while helping stimulate a clean energy economy built on innovation, technology, and our productive advantages. The energy title is a win-win for our rural communities, for consumers who want cleaner, lower- cost energy, and for our national security.” [Funny how the first item mentioned in the tax credits is wind turbines and the whole rest of the bit is about bio-fuels. The wind turbines are smoke and mirrors.] Today, we are faced with a new challenge – that of building a clean energy economy for the 21st century – and we need the help of our farmers and ranchers. Our national security, our economic security, and our environmental security demand that we grow our way toward energy independence. [My emphasis] The country that successfully replaces its imports of foreign oil with clean, home-grown energy will reap competitive and technological advantages that will keep it out front in the world for decades to come. We can all play a part in this new economy, but the productivity and ingenuity of Rural America is our greatest untapped resource in our quest to reduce our dependence on foreign oil."[4]

In her article, Ethanol Campaign Takes On Detractors, Lauren Etter writes, "With the ethanol industry facing growing criticism, a new industry group plans a splashy ad campaign next week that will appear in popular Capitol Hill publications, including The Hill and Roll Call. ..... The group, Renewable Fuels Now, brings together existing agriculture and ethanol groups, firing what it calls an opening salvo at a time when the industry is under siege from groups accusing the corn-based biofuel of perpetrating everything from environmental ruin to "crimes against humanity" for contributing to world hunger. ..... The first advertisement resembles a hostage note, and features mismatched paper cut-out letters that form a sentence reading: "How much longer can we be held hostage to foreign oil?""[8]

And in an article entitled Why should America expand its use of renewable fuels like ethanol?, the NCGA (National Corn Growers Association) quotes support for its position on corn ethanol (and it's claim that "It takes 23 percent more fossil energy to create a gallon of gasoline than that gallon of gasoline itself contains. [Does that mean that all oil extraction now has a 23% negative EROEI?] With ethanol, it's the other way around. It takes 22 percent less fossil energy to create an equivalent amount of energy in ethanol.") from a study done by the Argonne National Laboratory, Center for Transportation Research. (Argonne is a U.S. federal lab under the DOE.) The NCGA says "We believe a recent Argonne National Laboratory study (Michael Wang, Center for Transportation Research, Argonne National Laboratory) has laid to rest some long-held misunderstandings about ethanol and its important role in reducing America’s reliance on imported oil and our greenhouse gas emissions. In terms of key energy and environmental benefits, cornstarch ethanol comes out clearly ahead of petroleum based fuels, and tomorrow’s cellulosic-based ethanol would do even better."[14] That study, however, conveniently omits the oil-derived pesticides and herbicides, of which a hell of a lot is used on corn. It also conveniently doesn't bother to detail any numbers supporting the claim but relies on one chart showing the numbers in summary. The NCGA, by the way, are not unbiased. According to GM Watch, "Syngenta, Monsanto and others contributed about 11 percent of the National Corn Growers Association’s $7 million budget in fiscal year 2001, says spokesman Stewart Reeve. According to South Dakota corn-growing farmer Dennis Mitchell, 'It’s a big conflict of interest when the NCGA and the Soybean Association take money from agribusiness when they’re supposed to be representing the interests of farmers.'."[10] And, according to Poltical Friendster, "ADM operates through association mouthpieces, such as the NCGA and Renewable Fuels Ass'n. ADM controls 70% of the ethanol market and block reduction of the high tariff protecting domestically produced ethanol."[12]

In his article, Biofuels: The Five Myths of the Agro-fuels Transition, Eric Holt-Giménez places the biased government/agro-business misinformation in stark perspective. In that article he says, "By showing us only one side, “biofuels” fails to help us understand the profound consequences of the industrial transformation of our food and fuel systems—The Agro-fuels Transition. ..... Industrialized countries unleashed an “agro-fuels boom” by mandating ambitious renewable fuel targets. Renewable fuels are scheduled to provide 5.75% of Europe’s transport fuel by 2010, and 10 percent by 2020. The United States aims at 35 billion gallons a year. These targets far exceed the agricultural capacities of the industrial North. Europe would need to plant 70% of its farmland to fuel. The U.S.’s entire corn and soy harvest would need to be processed as ethanol and bio-diesel."[16]

Agro/bio-fuels are not going to prevent peak oil. It is already behind us. The shaky maintenance of the plateau on which we are sitting, and any growth in liquid fuels over the past 2-3 years to offset declines from existing fields, has come from alternative sources like tar sands, CTL, GTL, deep water, increasingly from heavy oil and already from bio-fuels. This reality, of course, is kept from the public view by constant redefinition by the DOE of terms like "proven reserves" which is constantly upgraded to include an ever wider basket of liquid fuels.

With both post-peak decline and global warming coming at us we need a strong, globe-wide reassesment of the agro/bio-fuel issue. Global warming will dramatically increase the potential for major crop losses and seriously degraded yields in the years ahead, particularly in the poorest countries straddling the equatorial belt. And as the pace of energy decline (particularly crude oil decline) picks up over this next decade the impact on the global distribution system will be destructive, particularly the high cost, low-profit global food distribution system.

Sources and additional reading:

1) How Biofuels Could Starve the Poor C. Ford Runge and Benjamin Senauer
2) Food to Biofuels a "Recipe for Disaster" By Thalif Deen
3) Nigeria: Agriculture, Pivot for Devt
4) Salazar: "Everyone Benefits From A Strong, Smart Farm Bill"
5) The alarm bells just keep ringing Eric Reguly
6) All About: Planes
7) Biofuels drive threatening food security--consumer watchdog By Ronnel Domingo
8) Ethanol Campaign Takes On Detractors By Lauren Etter
9) National Corn Growers Association - From Wikipedia
10) National Corn Growers Association
11) Itemized Lobbying Expenses for National Corn Growers Assn
12) National Corn Growers Association - NCGA
13) About Renewable Fuels Now
14) Why should America expand its use of renewable fuels like ethanol?
15) The Hidden Agenda behind the Bush Administration's Bio-Fuel Plan by F. William Engdahl
16) Biofuels: The Five Myths of the Agro-fuels Transition by Eric Holt-Giménez
17) Biofuels 2006 HOW IS THE GLOBAL VALUE CHAIN SHAPING UP? by Louis Strydom

Wednesday, October 31, 2007

Cascade Failure in River Systems with Multiple Dams

It is time once again to speak of dams and things. It is not that I'm becoming paranoid about dams. At least I don't think I am. It is simply that the more I see and read and hear the more I believe dams, and their other attendant water control/management infrastructure, to be perhaps the greatest infrastructure risk for society during the long, painful implosion of the global economy, and our individual national economies, that will follow peak oil. It is not the greatest overall risk, of course.

The greatest risk to our bloated human population will be the collapse of our industrialized agriculture system and our inability to produce and distribute sufficient food for our global numbers, especially with the collapse of the global distribution system with the steady decline of oil and natural gas availability, on which modern agriculture and food processing are critically dependant. Death by starvation is a slow, tortuous process, taking the young, the old and the ill first. But the collapse of a large dam, or a series of dams of various sizes in a common watershed in a cascade failure, represents a sudden and inescapable catastrophe for all of those in harm's way downstream from the collapse.

There are over 45,000 large dams (defined as having a height of more than 15 metres (48.75 feet), or above 5 metres holding a reservoir volume of more than 3 million cubic metres (87.75 million cubic feet)) around the world[6]. The majority of these are, you may be surprised to learn, in developing or underdeveloped nations. Although new dam starts have slowed in the past decade, according to the report 17 Large Dams Under Construction by Basin - Watersheds of the World, "As of 1998, there were 349 dams over 60 meters high under construction (IJHD 1998). The countries with the largest number of dams under construction were Turkey, China, Japan, Iraq, Iran, Greece, Romania, and Spain, as well as the Paraná basin in South America. The river basins with the most, large dams under construction were the Yangtze in China, with 38 dams under construction, the Tigris and Euphrates with 19, and the Danube with 11."[7]

Virtually every large river system in the world has numerous dams on both the main course and the various tributaries flowing into it. Even the mighty Amazon, viewed by most as one of the world's last, great unspoiled rivers, will soon have dozens of dams throughout it's watershed. The Brazilian government plans to build 31 new dams in the Amazon region by 2010. The largest of Brazil's planned hydro projects will "convert the Tocantins River into a series of lakes and hydro-electric dams, stretching for 1,200 miles and consisting of eight large dams and 19 smaller ones."[8]

The greatest risk is not simply that these large rivers have dams. It is the fact that they have multiple dams, most numbering in the dozens. There is great risk of a catastrophic cascade failure initiated by the collapse of a single upstream dam. Like a chain, a multi-dam water management system is as strong as its weakest link. And when that weakest dam is far upstream - which it usually is, generally in a remote and sparsely populated area, far from critical eyes - the downstream risk is magnified.

This is not an unprecedented risk, or even an unusual risk. Cascade failures have happened on numerous occasions over the last couple of centuries. The greatest was perhaps the collapse of the Henan Province dams in China in 1975. "As many as 230,000 people died in this domino-effect collapse of dams on the Huai River, some 85,000 in the flood waves and the rest from resulting epidemics and famine. The disaster began with the failure of the large Banqiao Dam in a typhoon, which resulted in the collapse of as many as 62 dams downstream."[6] The flood that was released in the collapse "created a wall of water 6 meters high and 12 kilometers wide ..... moving wall of water was 600 million cubic meters of more water." "The flood spread over more than a million hectares of farm land throughout 29 counties and municipalities."[9]

Consider the numbers. If a river system, like that above, has fifty, sixty or more dams on it, and each of those is, on average, holding back just the minimum large dam reservoir volume of three million cubic meters of water (the Banqiao Dam alone was designed to hold 492 million cubic meters), that entire system is holding back an amount of water equivalent to 3-million cubic meters times the number of dams. Fifty dams, one-hundred-fifty million cubic meters. In a cascade failure such as this, a person or community downstream is not at risk of inundation by the 3 million cubic meters in the dam nearest upriver from them. They are at risk from a cascade failure starting far upstream releasing a massive torrent of one-hundred-fifty million cubic meters of water. If that person/community is downstream from the dam lowest on the river - large population centres are more common at a river's mouth than along its course - that whole mass of water will come at them all at the same time in a wave that could be hundreds of feet high. Every dam downstream from the initial collapse, remember, has a design capacity of only 3-million cubic meters. It has a wave of water coming at it of 3-million cubic meters times the number of upstream dams already collapsed.

Of course, it is not just the massive volume of water behind a dam that rushes downstream as a dam collapses. The catchment area behind every dam gradually has an accumulated build-up of silt and debris. Over time any dam will completely silt-up. Some accumulate silt faster than others, largely a factor of geology and human activity upstream such as farming, lumbering and mining. When a dam collapses all of this silt and debris is also released. In addition the massive rush of water and debris scours the river banks and downstream river bottom and picks up even more debris as it progresses downstream. In floods it is usually the debris, not the water, that does the most damage. Flood water can carry boulders weighing many tons along as though they were pebbles.

Dams are not designed to withstand the pressures or the speed from the sudden influx of millions of cubic meters of water and debris such as this. They are designed to handle the build-up of water following heavy rainfall, or with the spring snowmelt, or the occasional collapse of a small bit of upstream river bank, or other normal events. As the report And The Walls Came Tumbling Down: Dam Safety Concerns Grow in Wake of Failures, Changing Climate says, "Building a totally safe dam is simply not possible. US dam-safety expert Robert Jansen says that dams “require defensive engineering, which means listing every imaginable force that might be imposed, examination of every possible set of circumstances, and incorporation of protective elements to cope with each and every condition.” This is clearly an unattainable target. In the real world, the degree of “defensive engineering” applied to the design of a dam will be decided by economics. ..... There will always therefore be pressure for dam builders to cut corners on safety."[6]

When a dam is designed to handle flood control (either alone or in conjunction with irrigation and/or hydro-electric generation) it must be designed with appropriate excess capacity (the Banqiao Dam was designed to accommodate 375 million cubic meters of flood storage)[8] and flood gates to handle the containment and controlled release of flood waters. "Flood gates are an expensive component of a dam's construction so engineers must consider a trade-off between the cost of the dam and the security it will provide. ..... The dam authorities must decide the proper excess capacity to maintain based on the trade-off they see between the value of stored water versus the value of flood control."[8]

There is another important component, as well, that has not been factored into the design of dams, most of which have been constructed in this past half century. Even dams currently being designed and built, however, share this shortcoming. That factor is global warming. As the above report notes, "Engineers design dams and their spillways to cope with the extreme floods that they predict using past records of streamflow and precipitation. It is vital that spillways are adequately sized – if a spillway is overwhelmed there is a high risk of a dam break. ..... But the assumption that we live in a stable climate no longer holds. Streamflow patterns are changing and are almost certain to continue to change, and at an accelerating rate, over the lifetime of the world’s dams. As noted in a World Commission on Dams’ background paper: “The major implications of climate change for dams and reservoirs are firstly that the future can no longer be assumed to be like the past, and secondly that the future is uncertain.”."[6]

As it looks at the moment, allowance for climate change is not likely to be built into the design of new dams anytime soon, let alone upgrading the existing dam inventory. There seems to be a large dose of denial amongst those involved in the dam designing/building industry. "While the climatic future is indeed filled with uncertainties, one trend upon which climatologists almost universally agree is that we will see (and indeed are already seeing) more extreme storms and increasingly severe floods. And yet, alarmingly, the vast majority of dam proponents and operators deny that climate change is even relevant for dam safety. The president of a major dam engineering firm told this author last year that climate change is "a problem for dams in 20 or 30 years, but not now."."[6] Even were that the case, that 20 to 30 years is exactly the time when the combined impact of global warming and oil depletion will severely hamper our ability and desire to upgrade dams to a safe level. Even to bring the world's dams up to levels currently considered safe that investment would be sizable. "But if securing US dams would cost $30 billion [some estimates, in fact, exceed $100 billion for U.S. dams] and the US has an estimated 10% of the world’s dams, a ballpark figure for the global under-investment in dam safety would be $300 billion."[6]

That state of denial also manifests itself at government levels, sometimes in the extreme. The most common and obvious form of this government denial, of course, is in insufficient budget allocations to maintain the dam inventory at safe levels. Following the catastrophic Henan Province cascade dam failure that killed an estimated 230,000 people in 1975, however, "The Chinese government kept the incident secret for about 20 years, but information on the disaster was eventually leaked to the outside world."[6] If this was possible, even in a closed totalitarian state, in an age of instant global communication, what might happen with those catastrophes in 20 to 30 years time in a very changed, power-reduced world?

Few countries have, or can even afford, comprehensive dam inspection/maintenance safety programs. Most, especially in underdeveloped countries, were built with inordinately expensive borrowed funds, monies which are not sufficient to cover future maintenance which may not be needed for 20-30 years after the dam's completion. "Despite the massive risk to human life and property posed by large dams, few countries have comprehensive dam safety legislation. Such laws should cover the engineering criteria that new dams must meet; the regular inspection and repair of old dams; and the preparation of emergency evacuation plans for people living downstream. ..... Studies in the US have shown that where early warning systems and evacuation plans are in place, the fatalities caused by dam bursts are on average reduced by a factor of more than 100. However, such plans have been made for only a handful of the world's dams, mostly in the US, Canada and Australia...."[6]

Even where safety legislation and programs exist, however, it generally treats dams on a one by one basis. Each dam is designed, built, inspected, maintained as though it were a structure in isolation. But most large river systems have, as noted earlier, multiple dams along their course. The excess capacity of any dam is designed to accommodate a particular volume of water from floods or other designed-for events. But they are designed assuming that all other conditions are normal and that the combined infrastructure of dams on the river will remain intact through the event (If I did not already know it instinctively, thirty years of system design experience would have taught me that you never design a system with the assumption it will work perfectly). In other words, a dam designed with a flood containment capacity of 300 million cubic meters assumes that that volume will be delivered by nature. The fact that there is a dam upstream with a capacity of 500 million cubic meters, or a series of dams with a total capacity of a billion cubic meters, is irrelevant in the design.

As we pass peak oil and the budgets and abilities to properly maintain our massive dam inventory diminish over time (time in which those dams continue to age and require increased, not decreased, maintenance) this design shortcoming will become critical for those water courses with multiple dams, which includes most of our large river systems. The risk to any dam on such systems is not the once-in-a-hundred-years or once-in-a-thousand-years flood that the dam is designed to accommodate but rather the combined capacity of all of the dams upstream from that dam plus the hundred-year or thousand-year flood. No one, especially those living along the banks of such river systems, should take any solace from the fact that such events may be twenty or thirty years in the future. That should, in fact, be more a cause for serious concern than solace. That future in which those failures increase in probability is a future of declining energy and infrastructure maintenance budgets and increased climatic extremes, a potentially deadly combination.


Additional reading:

1) Fragmentation Of Riparian Floras In Rivers With Multiple Dams
2) Simulation of Dam Failures in Multidike Reservoirs Arranged in Cascade
3) NOTE: The following emails are reproduced in chronological order ...
4) Federal Guidelines for Dam Safety
5) Revised Criteria for Assigning Hazard Potential Ratings to BLM Dams
6) And The Walls Came Tumbling Down: Dam Safety Concerns Grow in Wake of Failures, Changing Climate
7) 17 Large Dams Under Construction by Basin - Watersheds of the World
8) The Amazon Rainforest
9) The Catastrophic Dam Failures in China in August 1975

Monday, October 29, 2007

The Approaching Peak Export of Everything

Over the past half century we have become a truly global society. To those responsible, and perhaps millions or even billions of others, it seemed a good idea at the time. Many others, and steadily more through the benefit of hindsight, think otherwise.

There are no nations that are wholly disconnected from the global trade system, even among the most impoverished of third world countries. The whole concept of national self-sufficiency and self-reliance seems, in fact, to temporarily have been largely abandoned, at least in the developed, industrialized nations. The collateral damage in civilian lives in even the most minor of skirmishes, when long supply lines get disrupted, increases daily.

As we approach Peak Oil, if in fact we have not already arrived there as of May 2005, this has increasingly serious implications. The ongoing state of denial in the halls of government, business and industry, aided and abetted by the institutionalized apathy and outright disinformation in corporate-controlled mainstream media, is even more serious still.

Of late, those in the Peak Oil movement have begun to realize that peak oil is not going to be the defining watershed they had anticipated. That watershed, it is now realized, will precede peak oil, if it is still in the future, by a crisis in the global reduction of oil exports, peak oil exports. Whether or not we are yet arrived at peak oil, in fact, we very much appear to have already passed peak exports.

With increased oil revenues in the producing/exporting nations like those in the middle east comes an increased level of affluence for their citizens. That greater affluence means increased energy consumption at home with growing demand for automobiles and energy-consuming durable goods, but often dramatically increased with ventures like massive, year-round, 24-hour-a-day, indoor snow-ski facilities in the middle of the scorching desert.

No one in the developed countries - we are, after all, the primary importers and consumers of that oil - should begrudge those people their increased affluence, especially as it generally still does not approach the level of affluence in those western nations. But they do. That is partly, it appears, based on the sense of entitlement that has developed in western nations concerning the world's oil. We see it as ours. We are happy to buy it from the producing nations, seemingly irregardless of price, but are not willing to share it with them, even though it comes out of the ground in their country. So it is not the increased affluence that bothers people in developed nations, though it well could if that were to rival our own, but rather the increased energy consumption, particularly of oil, that goes along with it.

The wealth and affluence of western nations, we are constantly reminded through incessantly repeated phrases like good old American ingenuity, was built on the innovative use of the energy in oil to invent and develop the wondrous and complex new technologies on which the developed world is based. The energy from oil drives our technological societies, fuels that continued innovation, propels man out into space, to the depths of the oceans and to the frigid regions of the poles. The energy from oil has made western nations, in our own collective minds at least, not just rulers of the world but masters of the universe.

The expensive cars and home entertainment systems and heated indoor pools are perks, rewards for each of our roles in building that complex, technological society. They are not, as they appear to be in the developing world, their own raison d'etre. They are not the goal but simply the rewards for achieving it. The rising affluence in those oil-exporting nations is being purchased, not earned. The money with which it is being purchased derives from the same technological development of those first world nations in which the affluence is earned through innovation. In those first world nations energy from oil is being invested to build and power a society and culture. In those oil exporting nations the money paid by those first world nations for that oil is being squandered building decadent toys. So believes the populace of those oil-consuming, first-world nations.

This may not be a conscious belief or even a belief of our own choosing. It is a belief fostered largely by the corporate-controlled news media. We are constantly bombarded with images of the massive contradictions in those oil-exporting nations, the brutal suppression of women's rights, the abject poverty and virtual slavery of the lower classes, the constant violence and brutality in the streets, the wars, the terrorism, the roadside bombs, the suicide bombers, the beheadings. These are all contrasted against the indoor ski hills, the fifty storey, sail-shaped, climate-controlled hotels with helicopter pads on the roof, the private golf courses, the wealthy enclaves of new homes on land expensively reclaimed from the sea. There is no middle ground, just squalor and opulence, paupers and kings, sons of paupers and princes.

This is further contrasted against the constant images from our own society of our technology, our innovation, our ventures into space, our unending scientific achievements, our application of our innovative technology, and bolstered by the constant reminder of our reinvestment of the wealth accrued from our achievements in further research and development to assure an even better tomorrow. With our wealth we are building the future. With theirs they are building toys for their present, decadent gratification.

All of this media focus on the extreme contrasts in those oil producing/exporting countries and between those countries and our own serves two aims. It builds begrudging public sympathy for the constant whining by the corporate oil majors about the increasing number of state-owned oil companies in the still-exporting nations and how their increasing resource nationalism blocks access to those reserves by those oil majors and their claimed superior development and extraction technology. It also builds that public belief in our oil entitlement and assuages our apathy and acceptance for our governments doing whatever is necessary to ensure ongoing access to our oil.

The borderline between decadent competitor and evil enemy is kept very thin through these caricatured methods of portraying the people and leadership of these oil producing/exporting nations. It perpetuates the us and them mentality. The angst that it builds in the populace of our own nations over the constantly escalating price of gasoline and other commodities can very easily and quickly be parlayed into an acceptance of the need to wage war if our access to our oil is in any way diminished or threatened.

Let us be clear what it is that is being demonized as resource nationalism. It is somewhat akin to someone of middle age becoming suddenly conscious of their own mortality and deciding to take a little better care of their health. The government and leadership of those oil producing/exporting nations are becoming aware of their own nation's mortality, or at lease that of their goose that lays the golden eggs. They are suddenly becoming conscious of the finiteness and approaching decline of their only tradeable resource. And they are becoming increasingly aware of their country's own future needs for that same resource. More importantly, the general populace of those nations is becoming increasingly aware of their future need of that resource. The affluence they are now becoming accustomed to, they realize, is dependent on not the sale but the consumption of that resource.

That realization by the people increases the tenuousness of the control the leadership has over their people. Ultimately control through government is only workable when the people are prepared to accept that control. The more aware they become of their collective power the more they expect/demand in return for accepting that control.

This all amasses as a delicate quandary for the leadership of those oil-producing/ exporting nations. Do they continue to supply oil to the developed nations as fast as they ask, in return for further increasing their own personal wealth, and risk losing control of their own people? Or do they ensure the ongoing support of their people and their submission to authority and control by withholding enough of that resource from the market to continue to build the affluence of their own people for the foreseeable future, thus risking the ire of the importing nations? I believe the answer has been selected. They fear their own people more than the rich western nations, especially since they have control of the energy that powers the technology that makes those nations powerful.

What is happening in the oil industry and the geopolitics that swirl around it almost certainly will not be going unnoticed in other critical industries built around globally traded resources and commodities like food, mineral resources, and others. Any resource or commodity moved about on the conveyor belt of global trade that is important or critical to the future survivability of the source nation must, in the wake of what is happening with oil, be looked at by those nations in the same critical light. The same basic quandary will exist for all. What is more important; the short term building of elitist wealth and affluence that cannot be sustained or the long term survivability of the nation and its people? The closer any resource gets to depletion the more critical that issue becomes.

It has become increasingly difficult in our modern world for even the most dictatorial and authoritarian leadership to withhold and hide information from its nation's determined citizenry. The internet has been an astoundingly important tool in bringing that situation about. In those nations where the leadership tries to maintain even the veneer of social freedoms keeping the people from that information is impossible.

As we have proven throughout our history, it does not require that the whole population be rocket scientists for the rocket to be invented. It likewise does not require that everyone understand the concept of finiteness or the geology of oil fields or the molecular biology and nutrient-absorption of plants for there to develop an understanding of the limits to our growth, a stark realization that infinite growth is not possible. That is the power of ideas and knowledge. Once they have sprung into being as a meme from the mind of even a single individual they are accessible by all, shareable by all, and can potentially be propagated through the entire human population. That is the power of the human intellect. Biological evolution, the dispersal of a new gene through even the local population of one species happens slowly over geological time. The dispersal of a new meme through the entire human population can happen very quickly, even instantaneously through mass, global communications.

Through the ongoing focus on and debate over a single resource in the peak oil dialogue more and more people throughout the world are becoming intensely aware of resource finiteness, of resource depletion, and of the implications for the users of that resource as depletion and exhaustion of that resource nears. Oil is critical to the structure and functioning of our modern society. As such, the potential of its depletion, the implications to that modern society of it eventually running out, the impact on our global, perpetual-growth economy of even a developing and growing insufficiency of it to meet our societal needs, is becoming increasingly worrisome and even frightening.

But that focus on oil's finiteness is causing more and more people to consider the finiteness of other resources and the impact that their depletion, individually or collectively, will have on our society as well. In addition, and perhaps far more importantly, the widespread use of oil, the awareness of the thousands of products derived from it, the critical importance of it in our modern agriculture and our ability to produce the food needed by our 6.6 billion population, has caused people to become increasingly conscious of the depth and breadth to which a resource is used, the applications of it, the depth of our society's dependence on it.

I have written several articles for the blog (Peak Oil is not About Running Out of Oil!!!! , Post-Peak Agricultural Capacity, Plant stomachs and animal stomachs: the differences and similarities, Plants with stomachs - Peak oil implications, Ethanol/bio-diesel vs food and Soil fertility and carrying capacity) discussing the implications of oil depletion on our ability to produce the food required by our massive and excessive human population. The crux of the problem is that our ability to feed ourselves, at our current population, has become critically dependent on oil and its close cousin, natural gas.

The fertilizers that sustain the artificial fertility and productivity in over-cropped, nutrient-depleted, organically-dead soils is produced from natural gas. The pesticides that have to be employed in ever-greater volumes to fight off the increasingly pesticide-resistant insects and pests that prey on our crops and the herbicides used in ever-increasing amounts to fight off the encroachment of adaptive, herbicide-resistant weeds are both derived from oil. The more we use pesticides and herbicides the more resistant the rapidly-evolving organisms become that we use them against. The species that are most seriously impacted over the long-term, in fact, are the slowly evolving species, such as ourselves and other mammals. We are creating an increasingly toxic world with our constant release of our agrochemicals into an environment that has not evolved to break them down and recycle them. Our chemicals simply continue to accumulate in the soil, in the water, in the atmosphere, and in the tissue of living creatures, including ourselves. The higher up the food chain a species is the more saturated their cells become with our toxic chemicals.

The energy to build the increasingly colossal farm machinery and irrigation systems and the fuel to run those machines is derived from oil. And the fuel that drives the global food distribution system - the food on your table travels an estimated average of 1,500 miles to get there - that powers the refrigeration critical to long-distance shipping and long-term storage is derived from oil. The energy that drives the food processing industry, that keeps the food fresh at 24-hour, air-conditioned supermarkets, is all driven by fossil fuels. It is reasonably estimated that ten calories of fossil fuel energy are consumed in the production, preparation and distribution of every single calorie of food.

But the consumption of fossil fuel energy in feeding the human population is not the issue, nor the point of this article. It is estimated that as much as fifty percent of the food consumed globally originates in a country other than that in which it is being consumed. Put another way, fifty percent of the food being produced in countries around the world is leaving the country where it is produced to feed other people. Even that food consumed within the country of origin may have traveled a considerable distance before being consumed, often exiting the country and subsequently returning after a circuitous trip through the global distribution system.

As the global population continues to rise, and the population within nations, the demand for resources by a nation's growing population increases. If there is an increase in affluence in the nation, such as is happening in oil-exporting countries, resource demands grow even faster. If it is a natural human tendency to share one's bounty with others less fortunate, others in need - and I do not accept, at least in the modern industrialized world, that it is - any desire to share diminishes drastically when that to be shared is critical to one's personal survival and is in short supply.

That sentiment also manifests at the national level. It is what is being observed in the so-called resource nationalism that is the current cause of concern in the energy field. Most nations are quite prepared to sell their resources and commodities, even donate some of them to nations and people in need. When that country does not have enough of that resource to satisfy its internal needs, however, that willingness to sell or share diminishes or, as will increasingly be the case, disappears. As the prospect rises of the potential depletion of that resource, and particular as that point nears, the future needs of the nation and its people becomes the focus as much as current needs.

There is no resource more critical to the survival of a nation or its people than food. But food is more than just..... food. It is the land on which it is grown, the water for irrigation, the labour/energy to plant, manage, harvest, and process the food, the seeds from which the crop is grown, the distribution system to get the product to market, the weather and climatic conditions needed for growing the crop, any equipment needed at whatever level of technology to produce the crop, and more. The sufficiency of all of these resources must be factored into any consideration of a nation's future ability to feed its own people.

When a person or a nation reaches that critical point of consciousness of the needs for a resource tomorrow as well as today the result can be a dramatic shift in the attitude of the sale or trading of that resource. It can also be a point of major confusion, as former recipients/purchasers of that commodity wonder at the cause of the change in attitude, especially so if their focus is strictly on today. It can also, whether on a local, personal level, or an international level when it involves nations and the global trade system, be the source of considerable conflict, even wars.

As is obvious by the concerns in the energy field over resource nationalism by certain nations, all people and nations are not going to reach this critical juncture with regard to all resources at the same time. They should. What applies to one resource for one nation applies to all resources for all nations. It is far more likely, however, that the development of these flashpoints will be piecemeal. One nation at a time will become conscious of its own future needs for a particular resource, nationalize it and cut back on the sale and export of that resource/ commodity.

From this point forward, however, we should begin to see an increasing pattern of such shifts in trade policy, an increased incidence of export curbs to protect a nation's future access to an important domestic resource/commodity. As we are approaching near-simultaneous peaks in so many widely used resources (most mineral resources, water, wood and other non-food agricultural products, etc.) the frequency of these events should definitely be on the increase over these next several years as we pass the peak of global oil and fossil fuel production and head down the downslope. We have built our modern world, and the global trade system, on the back of cheap and plentiful fossil fuels. We will all ride the downslope together.

Thursday, October 25, 2007

Growing Global Export Crisis not restricted to Oil

It is only recently that people have started to wake up to the realization that peak oil - the point where global oil production reaches a peak and goes into a terminal decline - will be preceded by a global oil export peak. Until recently those in the developed nations of the first world had blithely assumed that all oil production in producing countries outside their own borders was available for export and available on the market for their import and purchase.

This, of course, failed to take into account the domestic needs for that oil in those producing/exporting countries. Domestic oil demand and consumption in those producing countries, such as those in OPEC - largely a function of increased affluence because of those very oil revenues - is growing faster than the growth in the rate of production. This means that not only will their exports decline as a result of peak oil, when they reach it, but also as a result of their rapidly increasing domestic consumption.

Internal demand, needless to say, will not diminish with declining production. Not only has the level of affluence in those producing/exporting nations risen but so has the population as citizens feel more confident about their children's futures as the level of affluence and job security rise. In many of those producing/exporting nations over 50 percent of the population is now under twenty years of age. This sets those nations up for a serious demand crunch just at the time their oil production and exports begin to diminish.

The steepness of the oil supply downslope on the other side of peak-oil/peak-exports will, in fact, be significantly greater than previously considered - as many presenters at the recent ASPO-USA conference in Houston stressed - and greater than the rate built into the majority of the oil depletion models. The rate of decline of oil availability will be a combination of the rate of production decline plus the rate of increased consumption in exporting countries. In the end, of course, it means that oil could cease to be available for purchase by major oil consuming nations long before the eventual point of oil depletion. The potential for wars to ensure a greater proportion of the remaining oil for importing nations increases markedly with this scenario.

But oil is not the only resource traded on the global market that will, in the near-term, experience an export crisis and serve as a potential source of conflict and wars. We live in an increasingly globalized society where there is a growing geographical separation between producer and consumer. Every tradeable commodity is ceaselessly moved around the globe, millions of tons of goods on the high seas and in the air and moving over land by rail and road transport every day. Sooner rather than later, as the global transportation/distribution system begins to break down for lack of fuel, that globalized movement of goods will run into serious problems. Demand will cease to be the driver of trade. Nor will it be driven by the rate at which production can be managed. Trade will be limited by the ability to get goods from producer to consumer, a limitation that will grow as fossil fuel supplies, particularly oil, go into decline and highly-indebted global shipping companies begin to collapse under the burden of fuel costs and shortages of fuel.

Relatively speaking, how big a problem is Peak Oil? Minor really, when you consider the implications of global Peak Food. Of the 194 food producing countries on the planet all but about fifteen are past or at Peak Food. Over 95-percent of all food producing countries are now net importers of food. In reality there is not one among the 194 nations on the planet that internally produces all of the food that its citizens consume. The citizens of net food importing nations are dependent for much of their primary nutritional needs on the dwindling agricultural excesses of that minuscule handful of fifteen net food exporters. This is particularly the case with global grain production and reserves. Grain and seeds are, after all, the most nutritionally-concentrated form of food that we eat.

Over the past several years the global emergency food grain reserves - established as part of the Green Revolution in the last century - have shrunk from a marginal 120-day supply to a critically low level of just 57 days. This level of reserve is deficient for offsetting any significant and widespread grain crop loss in areas such as Africa, South Asia, Eastern Europe and South America. All of these areas are not only the location of the largest proportion of food importing countries but also the areas where the earliest and most extreme impact of global warming will occur. Their risk of widespread local crop losses is extreme and getting moreso with each passing year. It is also not sufficient to cover any surge in demand from natural or man-made disasters during the Northern Hemisphere dormant season, the Northern Hemisphere being the source of the bulk of the world's food grains.

There is, however, an additional complication for the bulk of these food importing countries. Many, perhaps most of them, are net agricultural exporters. This may seem like a paradox but is not. The primary use of agricultural land in most of these countries is for the production of non-food cash crops. The land those nations need to produce their own food is tied up - usually by wealthy multi-national corporations, either directly or indirectly - producing cash crops like cotton, coffee, tea, rubber, cocoa, sugar, etc., or for the support of food animals for the production of export meat and dairy products. Much of the food agriculture in those nations is also committed for export (e.g. rice, nuts, dates, figs, wheat, corn and other grains, etc.), often under the control of or under contract to those same multinational food companies. Many of those nations are simultaneously agriculture rich and food poor. Despite a large base of agricultural land they cannot and do not produce enough food to feed their own people.

There is, of course, a strong an unbreakable link between peak oil, peak natural gas and peak food. And they will all occur at the same time. The artificial fertilizers that have allowed us to push our food production towards a peak, that we started climbing with the Green Revolution, is produced from natural gas. The herbicides and pesticides that have allowed us to protect our food crops from weeds, insect pests, and other plant diseases, are produced from oil. And the whole global food production and distribution system that transfers those food crop surpluses from the fifteen net food exporters to the 180 net food importers is critically dependent on the fuels produced from oil.

Many people take comfort in the belief and expectation that when things begin to deteriorate the government's first priority will focus on feeding it's citizens. That comfort may be misplaced as it does not bear out in the historical record. The majority of the worst famines of the twentieth century in which many millions of people have died, including current and recent ones such as that in Darfur, have been as much or more a function of government policy and geopolitics as they have been a matter of food shortages and crop losses. Food, unfortunately, is one of the first and preferred weapons of war, particularly internal and civil wars. Far more likely than a focus on ensuring food supplies, in fact, is that a government's first priority in hard times is security, particularly its own security and that of its elite and business leaders.

The fact that many of the agriculture exporting nations of the third and developing world have large proportions of their land under cultivation for exportable cash crops is, of course, a double edge sword. On the surface that would seem to suggest that those nations have large tracts of land that, when the global food distribution system begins to break down, can be turned to the production of food for the citizens of those nations. But those land holdings are in the hands of multinational companies or wealthy land owners. Without a focused program of nationalization and redistribution of those lands there is little likelihood that it will be voluntarily converted to local food production. But that land has generally been raped of its natural soil fertility by being bombarded with an annual systematic application of toxic agrochemicals and through consistent overproduction, and been subjected to a build up of soil salts through over irrigation. Turning it into productive food-producing soil will be a long-term process, too long to respond to a food emergency exacerbated by poor planning. In addition, the seeds and root stocks from which to produce the needed food will probably not be locally available and difficult to obtain externally with a faltering global distribution system.

If governments continue to bury their heads in the sand about peak oil and the implications for global transport and distribution the greatest crisis on our near term horizon will, in my opinion, be the reduction in the export of food and the inability to move food from producer to a growing mass of starving and malnourished people throughout the world. This is not and will not be a problem restricted to the third world. In developed nations like ours the grocery and food distribution system is built on just-in-time (JIT) principles. Our food travels an average of over 1500 miles from producer to consumer. Any serious disruption of the food distribution system could see our well-stocked supermarket shelves bare within a matter of days. We are, at the same time, in no better position than third world countries to gear up localized food production in response to a global food distribution emergency. We are, in general, even less skilled in producing food than those in third world nations and will, in fact, have a longer ramp up time than they will.

Politicians do not like publicly talking about problems unless they can offer solutions, especially problems that may not arise in the current election cycle. But the time and effort that will be needed to respond to a global food production and distribution crisis doesn't fit nicely into an election cycle. Our politicians, if they are to be of any use at all, must be prepared and have the courage to take a longer view, must be prepared to head off future crises rather than wait until they happen and respond to them. Unfortunately they see far more votes from fixing a problem than preventing it.

Tuesday, October 23, 2007

The Golden Zone

A new report titled Simplifying oil and gas exploration confidently claims "The Golden Zone is about to become a key concept in the petroleum and gas industry." The report details the theory developed over a period of ten years based on a database covering 120,000 productive oil fields. The report is the effort of researchers in Stavanger, Norway - former senior researcher, now dean, Per Arne Bjørkum at the Faculty of Technology and Science at the University of Stavanger, and the researchers Paul Nadeau and Olav Walderhaug at Statoil. That project has determined that 90% of all oil and gas deposits on earth occur in the so-called Golden Zone, a zone in the earth's crust where temperatures are in the range 60-120C.[1]

The depth of this zone varies considerably from one location to another around the world. In some locations this is at depths of 1-2km. These are called warm reservoirs. In cold reservoirs the golden zone is at depths of 4-8km. The differing depths are largely a function of historic plate tectonic activity, cold reservoirs being closely associated with subduction zones. Warm reservoirs are most likely to occur in conjunction with, but not exclusive to, tectonic spreading zones such as rift valleys and sub-oceanic spreading ridges like the mid-Atlantic ridge.[7]

The temperature zone associated with the Golden Zone occurs commonly throughout the world. This does not, however, mean that all parts of the Golden Zone will contain oil and natural gas deposits. It just means there is a greater probability which should reduce the cost and risk associated with oil and gas exploration, especially for deep water reserves. Capitalizing on this theory and reducing exploration costs, however, will require the development of new and improved technology for sensing and measuring the geothermal gradient (the rate of increase in temperature per unit depth in the earth).[5]

This new theory does not preclude the discovery of oil or natural gas in zones where the temperature is outside the 60-120C range. Oil does occur in lower temperature zones but this oil is generally heavier and of poorer quality. At the moment there is not a great deal of refining capacity around the world for handling this heavier oil.[1] The theory also does not negate the occurrence of tar-sands/oil-sands. These deposits are not really oil, however, but rather a type of bitumen which must be processed into synthetic oil.

At first glance it would appear that this study and theory should usher in a new era of more efficient, less costly oil and natural gas exploration that should result in the discovery of vast new hydrocarbon reserves. One analysts suggests, "This new understanding represents perhaps one of the main advances in petroleum geology."[5] This would clearly be bad news from a global warming perspective. Over-exuberance, however would be misplaced. What this theory does is effectively obliterate one of the cornucopian hopes of the oil and gas industry that to find more oil all they have to do is drill deeper.

Essentially this theory says that oil will not occur at depths below the Golden Zone which contains almost all of today's oil fields. According to the research team, "Reservoirs within geologic traps which occur in this zone contain an exceptional number of the discovered giant and super giant accumulations."[2] As the report suggests, "The hope of finding much more oil the deeper we drilled into the basement of the sedimentary basins, is about to fade." It would also seem to nullify the abiotic oil theory which suggests that oil is being perpetually generated at the earth's mantle, the layer of the earth's crust immediately above the outer core.

Where the theory will have the greatest positive impact for the oil and gas industry is in the exploration for sub-oceanic - particularly deep water - reserves. Deep water exploration is tremendously difficult and expensive and anything that helps reduce the exploration risk is a bonus for the oil industry. The theory is unlikely to result in the discovery of many new giant or super-giant fields on land, however. New land-based fields are becoming extremely rare.

Certainly the oil and gas industry, and politicians in every developed and developing nation, will probably latch onto this new theory. Cautionary notes in the research papers will be ignored as the theory is touted as proof that we are about to enter a new golden age of oil discovery and that peak oil proponents are out to lunch. That will be the front page news. The reality that the theory does not allow business as usual to be prolonged will be buried on the back page, if it appears as well. My perception is that this theory is little more than an explanation of the location and occurrence of existing fields, not the road map to tomorrow's fields.
1) Simplifying oil and gas exploration
2) Golden Zone Implications for Global Exploration
3) New Theory Predicts Location Of Oil And Gas Reserves
4) New Theory Predicts Location Of Oil And Gas Reserves
5) The Golden Zone
6) Geothermal gradient
7) Geothermal Gradient