Panic! at the Citgo: Running Out of Oil, and Why 450 is the New 350.
The International Energy Agency (IEA) issued their annual World Energy Outlook, and despite a drop in 2009 demand due to the global recession, the numbers look grim. As Nobuo Tanaka, Executive Director of the IEA put it;
“…a continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security.”
The IEA is to consuming countries what OPEC is to producing ones, advising members on energy supply and policy.Their activities include estimating how much oil is available and what future energy consumption will look like, and things may be even grimmer than they have been letting on.
Oil supplies in flux
According to a report in the Guardian, the Agency may have deliberately overstated world oil supplies, in order to avoid a worldwide buying panic. An unnamed (and therefore unverified) sources claim that the US has played an influential role in encouraging the organization to “underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.” Another (also unnamed) source was quoted as saying “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad.”
“Peak oil” refers to the point at which the rate of production of oil, which has generally marched steadily upwards, begins to decline. If we continue our current energy habits and assume no change in government policies (called the ‘Reference Scenario‘), we will need to produce an additional 20 million barrels a day by 2030. It is not clear where that oil supply would come from, and is projected as “crude oil fields yet to be found.”
Is even ’450′ a stretch?
In the ‘Reference Scenario’, the world’s primary energy demand in 2030 is estimated to grow by a staggering 40% over the current figures. Much of this increase would be in coal use, which would grow by 50% and have a severe impact on climate change.
The IEA also looked at the alternative scenario needed to hold greenhouse gasses to 450 ppm, which is generally considered the maximum upper limit to avoid irreversible and possibly cataclysmic change (we are currently at 385.) What would need to happen? By 2030, a third of the world’s power needs to come from renewables and/or nuclear, 60% of cars need to be plug in or hybrid, and we need to invest nearly $10 Trillion globally in energy efficiency. These are all what I would call ‘stretch goals’, and is partially why others have described staying below 450 ppm as pursuing “the greatest achievement in the history of the human race.”
The IEA didn’t even bother figuring out what it would take to reduce total ghg back to 350 ppm, a ‘do no harm’ target which seems to be completely out of reach.
Pay now or pay later
Conspiracy theorists claim that global warming is a hoax designed to create new ‘green’ profits via cap-and-trade and clean technology. While some concerns about Wall Street are always warranted, here is the simple math: The IEA estimates that carbon should eventually carry a cost of around $50 per ton, which translates to $20 per barrel of oil. If we continue on our current path, however, demand will likely drive up oil prices by at least $50 per barrel, sending over $4 trillion dollars to OPEC members in the next 20 years, just for the oil And the cost of climate change? The NRDC estimates that in the US alone, it will be $300 Billion a year by 2030. Many put the global figure in the Trillions.
So whether for the planet or the pocketbook, it’s time to wake up. Things simply will not stay the way they are. We can either start spending on clean energy and efficiency now, or pay even more for the privilege of using up more fossil fuel and polluting the planet, with dire consequences. Why does this seem like a difficult choice?