Daniel Yergin: US Oil Output Helping Avert Crisis

Its a good post you link to there. Production forecasts from CERA or EIA or anyone else always need to be taken with a grain of salt, and it is worth noting track records. I imagine CERA is more often correct than incorrect though. 

Yergin impressed me way back when I read “The Prize” more than 10 years ago and he thoroughly debunked Peak Oil. At that time I held the conventional view that we were facing Peak Oil, but Yergin argued that these claims have been being made since the 1800’s and technology innovation keeps overcoming the limits. I have come around to Yergin’s view. Its not that Hubbert was wrong, just that his Peak Oil model did not include shale or technology innovation.

My criticism of Yergin is his seeming inability to confront CO2 pollution or global warming in any sort of coherent manner. Its like he wishes people would just not talk about it.

Joris,

These are good papers, I particularly liked the first one comparing the geological view versus the technological view of future oil production. I fall squarely into the technology camp. I believe the geological view is correct as it relates to conventional oil production only, but there is also shale, bitumen, heavy oil, coal to liquids, gas to liquids, CO2-EOR, potentially even pure synthetics produced with nuclear power and vast reserves of methane hydrates. The march of technology innovation is inexorable.

These new resources may require higher prices, as is stated in the paper, but then people will simply pay higher prices or else innovate away from oil consumption (electric vehicles for instance). We have already seen oil prices triple in the last decade and achieve a new normal at around $100/barrel and that unlocked vast reserves of shale for which the technology and infrastructure are still very young. Proven reserves of oil have gone up in the last decade since we hit Hubbert’s Peak.

I take all projections with a grain of salt, but one thing that is clear is that no one predicted the scale or impact of the shale boom, and we have just gotten started there. And we are one innovation away from tapping the methane hydrates, the largest hydrocarbon reserves of all. So while I will leave it to others to predict the specifics of supply and demand and prices, I have no fear of hydrocarbon shortages.

I am Green through and through and totally believe we need to clean up our environmental problems. I just happen to believe the answer lies in improving technology, and I will admit to being an optimist and enthusiast. Yes we have big problems, but identifying problems is the first step in solving them. I have to say I get tired of hearing endless doom and gloom from various quarters, I am much more interested in inventions and solutions.

For what it is worth I don’t think we will ever run out of hydrocarbons, but that should not be interpreted as saying that we should extract them with no concern for the ecological consequences. But I also see the benefits of using hydrocarbons than many in the environmental community willfully ignore. We are not to going to stop using them so it is paramount to find practical solutions to their very real and damaging impacts.

As for sequestration I have recently come around to the view point of the value in using CO2 as a working fluid in producing hydrocarbons. A cutting edge avenue of research that I will be writing about soon is to use supercritical CO2 to produce the methane hydrates, leaving the CO2 in the hydrate formations. It is pretty exciting and promising stuff. 

There is a distinction to be drawn between reducing carbon emissions and avoiding all use of hydrocarbons. I’m all for being efficient and judicious in our use of hydrocarbons and in particular of capturing and recycling them. But hydrocarbons remain the backbone of industrial civilization. The raw material by which we manufacture chemicals, plastics, steel, concrete, fertilizers, pharmaceuticals, etc, etc, they are not simply fuels, we can’t physically manufacture solar panels, wind turbines or nuclear power plants without hydrocarbons. This is what I mean when I say that we will never stop using them. We have an issue that is serious regarding carbon loading in the atmosphere, I do not dispute this, but I do dispute the oft-repeated argument that the answer to this problem lies in leaving all the hydrocarbons in the ground and opposing every instance of hydrocarbon development. I believe we need to move beyond the technology status quo and that the unfettered pollution of our atmosphere is unacceptable, but the solutions lie in advanced technology development.

When I was a kid growing up in Washington DC, the Potomac River, flowing through our nation’s capitol was so polluted you could see feces in the water. We fixed that problem and it did not require that people stop defecating, it required advanced water treatment plants. We used to have a problem with acid rain caused by the sulfur from coal power plants. It was destroying the Adirondacks where I also spent a lot of time. We solved that problem too, and it did not requiring abandoning coal, in fact coal usage has gone up while pollution has gone down. Again, we did it with advanced technology, putting scrubbers on smoke stacks and as an added bonus the captured sulfur became a useful commodity product.

CO2 is a bigger and more difficult problem and requires holistic, systemic solutions, but it is solvable. We have countless sources of carbon emissions, some big, many small. Most of the small ones, autos for instance but also home furnaces, can be replaced by electric devices. For large sources of carbon emissions, some can be replaced by nukes and renewables, and for others we need an elaborate system of carbon capture. It is within our technical capacity to both build a continental scale CO2 pipeline infrastructure to move liquid CO2 around and also to reengineer our carbon combustion devices to make them more efficient and capture more effective. Beyond that we need effective land management practices that sequester carbon in the soil, there is great capacity there and it has the added bonus of improving agriculture, wildlands and habitat. At the end of the day we don’t need to eliminate every last molecule of CO2 emissions, the earth has a robust carbon cycle, we need to bring our industrial systems into harmony with the Earth’s natural systems and cycles.