Tag Archives: Oil
Shale Gas: Should We Take Their Word For It?
Do we really want to bet the Big Island’s future on the Energy Information Agency’s projections? It’s much more prudent to hedge our bets. Have a look at what people are saying about recent projections.
From the Post Carbon Institute:
Shale Gas Reality Check
The Energy Information Administration (EIA) recently released its Annual Energy Outlook 2015. How have their projections and assumptions changed over the last year, and how does it hold up to scrutiny against up-to-date production data from key shale gas and tight oil plays?
In 2014, Post Carbon Institute and David Hughes published the most thorough independent analysis of U.S. shale gas and tight oil production ever conducted, and now that analysis has been updated to assess the most current thinking from the EIA.
The update shows that the EIA’s Annual Energy Outlook 2015 reference case suffers from even greater optimism than the previous year—raising what were already highly questionable projections for cumulative shale gas production through 2040 by nine percent…. Read the rest
This recent Los Angeles Times article is one example of some of the reality:
U.S. officials cut estimate of recoverable Monterey Shale oil by 96%
By Louis Sahagun
Federal energy authorities have slashed by 96% the estimated amount of recoverable oil buried in California’s vast Monterey Shale deposits, deflating its potential as a national “black gold mine” of petroleum.
Just 600 million barrels of oil can be extracted with existing technology, far below the 13.7 billion barrels once thought recoverable from the jumbled layers of subterranean rock spread across much of Central California, the U.S. Energy Information Administration said…. Read the rest
Steve Horn, Research Fellow with DeSmogBlog, also wrote about the EIA’s projects. This article, Drilling Deeper: New Report Casts Doubt on Fracking Production Numbers, appeared in the Huffington Post:
The report’s findings differ vastly from the forward-looking projections published by the U.S. Energy Information Agency (EIA), a statistical sub-unit of the U.S. Department of Energy (DOE).
…”The Department of Energy’s forecasts–the ones everyone is relying on to guide our energy policy and planning–are overly optimistic based on what the actual well data are telling us,” Hughes — a geoscientist who formerly analyzed energy resources for over three decades for the Geological Survey of Canada — said in a press release about the reporting’s findings.
“By asking the right questions you soon realize that if the future of U.S. oil and natural gas production depends on resources in the country’s deep shale deposits…we are in for a big disappointment in the longer term….” Read the rest
Hawaii, Shale & Geothermal
Richard Ha writes:
Because Hawai‘i relies so much on oil for its energy, the state will be a major beneficiary of the shale oil phenomenon. Conventional oil development takes a long time – five to ten years – whereas activating a shale oil well takes less than a year.
The result is that whenever the Saudis try to raise the price of oil, our U.S. shale oil drillers will react wherever they can make money.
From The Barrel Blog, the essential perspective on global energy:
Energy Economist: Shale oil’s response to prices may call for industry re-evaluation
Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up. It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economists, explains in this month’s selection from the publication. Read the rest
At $70 a barrel, a lot of people make money and at $40, a lot of people lose money. This safety valve is very good for us in Hawai‘i.
This will give us time to make rational energy decisions. Oil and gas are still finite resources. Because two-thirds of our economy is based on consumer spending, we need to find solutions that take care of the rubbah slippah folks. Low prices for them strengthens the economy for all.
Each island has its own basket of energy resources. The Big Island, because of its abundant geothermal resource, has the biggest basket of lowest cost alternatives. O‘ahu has the smallest basket of resources and so it needs help from the other islands—hence, the talk about cabling resources.
The elephant in the room is cabling geothermal resources from the Big Island. That will never happen, though, unless the Big Island residents themselves receive a demonstrated benefit from geothermal.
So now we need to work on getting Big Islanders definite low cost and other benefits from geothermal—like making hydrogen for transportation and even nitrogen fertilizer.
Then we can have a group of Big Islanders, representing the people, sit across the table and negotiate the conditions under which the people would approve exporting energy off island.
I would think education for our keiki might be a good starting point.
Government Says ‘Plenty, Cheap, No Worry!’ But Others Say, ‘Worry’
Richard Ha writes:
This is a really good graph that shows three projections for future gas production through the year 2040. Click on this postcarbon.org graph and you'll see the black line shows a University of Texas study, the red line shows David Hughes's projection and the blue line represents the government's EIA projection.
The government projection shows nothing to worry about. Plenty, plenty, plenty!
But the others show an entirely different story. They suggest we better start making some other plans.
Conventional oil, which is our regular oil supply like from Russia and OPEC, hit its max in 2005. It's shale gas and oil that has increased our oil and natural gas supply in the last few years. But it appears that shale gas and oil will start to decline soon and if so, we need to start down the road to adapting to what will soon be again-rising oil prices.
On the Big Island, geothermal can replace oil and LNG. Not many other places are as fortunate. We just need to be smart and figure out what works.
Geothermal works. We don't have to get there tomorrow, and we don't have to get there in a straight line. We just have to get there.
We have a way to do this on the Big Island: Geothermal. It's a gift.
This podcast with David Hughes, author of the recent report Drilling Deeper for the Post Carbon Institute, talks more about this.
It's all common sense. It’s about data and science—water does not flow uphill, no matter how much we wish it would. Nothing about this is beyond the average person. I find that rubbah slippah folks understand all this in a few minutes.
The New Ahupuaa, Revisited
Richard Ha writes:
This is a post I wrote back in 2007. I recently reread it and realized it's the same story as what's happening today. It's six years later, and people still don't realize we don't have time to fool around.
I'm going to rerun the post here.
***
October 10, 2007
I spoke at the Hawai‘i Island Food Summit this past weekend, which was attended by Hawaiian cultural people, policy makers, university researchers, farmers, ranchers, and others.
The two-day conference asked the question, “How Can Hawai‘i Feed Itself?”
I felt like a small kid in class with his hand raised: “Call me! Call me!”
I sat on one of the panels, and said that our sustainability philosophy has to do with taking a long-term view of things. We are always moving so we’ll be in the proper position for the environment we anticipate five, 10 and 20 years from now.
I told them I had a nightmare that there would be a big meeting down by the pier one day, where they announce that food supplies were short because the oil supply was short and so we would have to send thousands of people out to discover new land.
I was afraid that they would send all the people with white hair out on the boats to find new land—all the Grandmas and Grandpas and me, but maybe not June.
Grandmas and Grandpas hobbled onto the boats with their canes and their wheelchairs, clutching all their medicines, and everybody gave all of us flower leis, and everyone was saying, “Aloha, Aloha, call us when you find land! Aloha!”
I spoke about where we want to be in five, 10 or 20 years. We know that energy-related costs will be high then. And that we need to provide food for Hawai‘i’s people.
We call our plan “The New Ahupua‘a.”
In old Hawai‘i, the ahupua‘a was a land division that stretched from the uplands to the sea, and it contained the resources necessary to support its human population—from fish and salt to fertile land for farming and, high up, wood for building, as well as much more.
Our “New Ahupua‘a” uses old knowledge along with modern technology to make the best use of our own land system and resources. We will move forward by looking backward.
• We plan to decouple ourselves from fossil fuel costs by developing a hydroelectric plant, which will allow us to grow various crops not normally grown at our location.
• We are moving toward a “village” concept of farming, and starting to include farmers from the area, who grow things we don’t, to farm with us. This way, the people who work on our farm come from the area around our farm. We will help them with food safety, pest control issues and distribution.
• We are developing a farmers market at our property on the highway, where the farmers who work with us can market their products.
• We will utilize as much of our own resources for fertilizer as possible, by developing a system of aquaponics, etc.
This “New Ahupua‘a” is our general framework for the future. It will allow us to produce more food than we can produce by ourselves. It is a safe strategy, in case the worst scenario happens; if it doesn’t, this plan will not hurt us.
It is a simple strategy. And we are committed to it.
My assessment of how we came to be here and where we need to be in the future is this: In the beginning, one hundred percent of the energy for food came from the sun. The mastodons ate leaves, the saber tooth tiger ate the mastodon and we ate the tiger and everything else.
The earth’s population was related to the amount of food we could gather or catch. And sometimes the food caught and ate us. So there were only so many of us roaming around.
Then some of us started to use horses and mules to help us grow food. As well as the sun, now animals provided some of the energy for cultivating food. We were able to grow more food, and so there were more of us.
About 150 years ago, we discovered oil. With oil we could utilize millions of horsepower to grow food—and we didn’t even need horses. Oil was plentiful and cheap; only about $3/barrel. We used oil to manufacture fertilizer, chemicals and for packaging and transportation.
Food became very, very plentiful and we started going to supermarkets to harvest and hunt for our food. Hunting for our food at the supermarkets was very good—the food did not eat us and now there are many, many, many of us.
But now we are approaching another change to the status quo—a situation being called “Peak Oil.” That’s when half of all the oil in existence is used up. Half the oil will still be left, but it will be increasingly hard to tap. At some point, the demand for oil—by billions and billions of people who cannot wait to get in their car and drive to McDonalds—will exceed the ability to pump that oil.
Food was cheap in the past because oil was cheap. Five years ago, oil was $30/barrel but now it’s over $80/barrel. Now that oil is becoming more and more expensive, food is also going to become much more expensive.
In the beginning the sun provided a hundred percent of the energy and it was free. Today oil is becoming very expensive, but sun energy is still free. The wind, the waves, the water—they are all free here in Hawaii. It’s the oil that is expensive.
For Hamakua Springs, the situation is not complicated at all. We need to use an alternate form of energy to help us grow food!
With alternate energy, we should be able to continue growing food—and maybe local food can be grown cheaper than food that is shipped here from far away.
I told the Food Summit attendees that we farmers need to grow plenty of food so that others can do what they do and so we continue to have a vibrant society. If we don’t plan ahead to provide enough food, and as a consequence every family has to return to farming to feed themselves, it would be a much more limited society. People would not be able to pursue the arts, write books, explore space. We would have way fewer choices – maybe only, “What color malo should I wear today?”
There was a feeling going through the Food Summit’s crowd that we were a part of something very important and very special. What I found different about this conference is that people left feeling that this was just the beginning.
We are going to take action.
***
Growing Food: A Reality Check
Richard Ha writes:
Hawai‘i is located in the humid subtropics and it is a weed, bug and plant-disease paradise. We have no winter here to help us kill off
bugs.
Farmers are not pesticide-crazed sprayers of toxic chemicals. They use cost-effective solutions to the pest problems of their particular crops. They use what’s least toxic, because they don’t want to harm themselves. They don’t overspray, because that wastes money. Farmers have common sense.
When we send farmers into battle against the pests, don’t shoot arrows at their backs. When we send them into battle against pests that use cannons, don’t send them out with swords and clubs.
If we do not want the large biotech companies to grow corn for seed, then write a bill that prohibits that. If we do not want GMO foods at all, then start with corn flakes and soda and ban those.
Consider these facts:
• Hawai‘i imports more than 85 percent of its food. That’s almost all of our food.
• Hawaii uses oil to generate more than 70 percent of its electricity. The U.S. mainland, which is both our supplier and our competitor, uses oil for only 2 percent of its electricity – so its costs are not skyrocketing from rising oil prices as much as ours are.
• The price of oil has quadrupled in the last 10 years, and will probably go higher.
• As oil prices rise, Hawai‘i becomes less and less food secure.
These are the realities that Big Island farmers face every day. We must be one of the least food secure places in the world.
From my blog post Definitions: Food Security vs. Food Self-Sufficiency:
“Food security” means being able to get adequate and sufficient food, regardless of where it comes from. These days, it comes from all over the world. We are able to buy food from all over because money comes into our economy from the outside, with military spending and tourism being primary contributors. That provides us with money to pay for general services to our society and to buy our food.
Food security involves farmers farming. If the farmer makes money, the farmers will farm. And if the farmers make money, then their products will be competitive with imported foods. And that will mean lower cost foods for all.
Try to encourage those things that gives our farmers a competitive advantage. Leverage our sun that shines all year long. Don’t ban GMO corn that can give our cattle ranchers a fighting chance.
Maybe we can grow the grain that will encourage poultry farms and fish, too.
If we had poultry and cattle manure, our organic farmers would have a nitrogen source that could help them produce food for a profit.
Let’s all sit down and talk. Farmers are not the enemy.
Guest Post: We Underestimate The Old Hawaiians
By guest blogger Rodrigo Romo:
With every question that seems to stir up controversy (geothermal, the Thirty Meter Telescope [TMT], etc.), the way I see it is to ask: "What would Kamehameha (or the old Hawaiians) do?"
The old Hawaiians lived in harmony with what the land/sea provided them, making sure they took care of their resources and making sure they were not depleted.
Would the old Hawaiians bring oil from distant lands to meet their energy needs? Or would they take advantage of what the land and the gods provided them (geothermal, solar, wind, hydroelectric)?
The old Hawaiians were famous for their star-based navigational skills. If they had the chance to further understand the universe from the top of Mauna Kea, would they pass on that opportunity? Or would they take advantage of the privileged location they were given by the land/gods to learn more about the universe?
I think part of the problem is that people underestimate what the old Hawaiians would do in today's technologically advanced world, and many think that they would still live like they did prior to the arrival of Cook.
I don't think that is the case. They were incredible wise people from an environmental point of view. They understood that by living on an island their resources were extremely limited and that their environment was very delicate.
Because of modern-day technology, we tend to forget that. It's easy for us to go to the grocery store and buy tomatoes from California, peaches from Chile and Atlantic salmon. We turn on the switch and expect the light to come on, because we know that there will be a ship/plane coming over to deliver our goods; goods that were not produced here from the land.
People see geothermal or wind as an intrusion to the environment, but have no problem with burning fossil fuels that are brought in from thousands of miles away.
They worry about the impact that a geothermal well may have on the air quality, but never think about the consequences that an oil spill from a tanker would have on our corals and the life around them.
People see the TMT as an intrusion into sacred land (regardless of the telescopes already present) but fail to see the wonderful opportunities it will provide to local young future Hawaiian scientists to be in the lead of space exploration.
We can learn a lot from the ways of the past: An understanding of the real value of our local resources, and how delicate our environment is. Combining that understanding with advances in technology will lead the path to achieving, or at least to moving closer to becoming a sustainable community/culture.
Aloha.
Rodrigo Romo was a member of the second Biosphere 2 crew. He is currently VP of Engineering for Zeta Corporation, where he is involved in water conservation projects. He lives in Hilo with his family.
Very Simple Explanation of ‘Energy Return on Investment’
Richard Ha writes:
Every organism, organization and even civilization needs surplus energy or it goes extinct.
When a mama cheetah catches an antelope, for instance, she needs to get enough energy from consuming that antelope to take care of her kids.
Let’s say all the antelopes are very skinny, and the energy she gets from eating a skinny antelope only gives her enough energy to make one more sprint, and that’s all.
That would be described as an "energy return on investment," an EROI, ratio of 1-1. She has no excess energy available to do anything but catch her next meal. That would be a very scary existence: She would have to catch an antelope on every single sprint, or her species would go extinct.
But if the antelopes got fatter, and the cheetah could make two sprints from eating one antelopes, we would call this an EROI of 2-1.
When the cheetah could make five runs from eating one antelope, things would be starting to look better (EROI 5-1). She would have energy left over to do more than just survive. She could spend time washing and playing with the kids.
At an EROI of 10 to 1, she could send the kids to grad school; things would be wonderful.
At an EROI of 30 to 1, the cheetah population would start to grow. The cheetahs would move into condominiums and take vacations in Hawai‘i.
So what does this mean in real life? Here’s some history.
In the 1930s, we could extract 100 barrels of oil from the ground by using the energy we got from one barrel of oil. That’s an EROI of 100-1.
By 1970, we were only getting 30 barrels of oil from the use of one barrel (an EROI of 30-1).
And in 2013, it’s around 10 barrels of oil (EROI 10-1).
Tar sands is around 5-1.
And biofuels are less than 3-1. Some biofuels (for example, alcohol from corn) are barely more than 1-1. You can see why putting our money and efforts into biofuels hardly makes sense.
Especially when you realize that geothermal, as we have in Hawai‘i, appears to have an EROI ratio of 11-1. It’s also significant to note that this rate won’t change anytime soon. The Big Island will be over the “hot spot,” which creates our geothermal conditions, for 500,000 to 1 million years.
Here is an article about the minimum EROI a sustainable society must have, by Charles A.S. Hall, Stephen Balogh and David J. R. Murphy.
What don’t we understand about this?
How to Predict What Your Life Will Look Like in the Future
For about 100 years (except for a few spikes in the 70s and 80s), oil cost about $20/barrel. One hundred years!
What’s happened to the price of oil lately is significant. And since oil is a finite resource, the price will likely keep on rising.
In 2002, everything was fine. And then in 2003, 2004, 2005 parents started telling their kids: “Hey, go turn off the lights.”
If the price of oil was just tracking inflation, it would be about $35/barrel right now. Instead, it’s $108/barrel.
We could almost use this type of a graph as a consumer price index for Hawai‘i. If I’d had this information before, I wouldn’t have needed to go to the Peak Oil conference to figure out what was going to happen.
This graph, which I prepared, predicts what your life will be like in the future. You can look at it and see, depending on how closely you’re tied to the electric grid and how much you drive your car, the direction in which your life will go.
We are lucky, though, to have an indigeous resource available to us here in Hawai‘i. Geothermal – which is low-cost, a proven technology and environmentally benign – is a gift that can help take care of all of us.
Great Podcast About Renewable Energy
Richard Ha writes:
This is a very interesting podcast by Robert Rapier, who spoke at the recent Association of the Study of Peak Oil (ASPO) conference.
He talks about a request for him to rank the top 50 renewable energy companies. By the time he reached the fifth one, it was looking iffy and by the time he reached the tenth company, he did not expect the rest to survive 10 more years.
It really is tough to do what Mother Nature did for free and to be competitive, cost-wise. Some have Mother Nature’s oil embedded in the process and so the break-even point of the renewable oil recedes into the horizon.
Some fail because of bad assumptions – like that the feedstock will be available for a cheap price. Only if the farmer makes money will the farmer grow feedstock.
Scale is a significant issue, too. The process is like cooking turkeys. It’s one thing when one is cooking just one turkey in a bench scale experiment. It is quite another when one is cooking 100 turkeys per hour in a large oven. How do you make sure the turkeys in the middle are not raw and the ones on the edge are not burnt to a crisp?
What can we make of the fact that oil is $100 per barrel and yet we are in a recession? One would expect oil prices to decline in a recession. Could we be in an endless recession?
And what about the difference in the oil consumption of different countries? Will they be in a permanent recession? China uses only two barrels of oil per person per year while the U.S. uses 26 barrels of oil per person per year.
They can grow their economy at $100 per barrel oil, and we are barely keeping our heads above water at the same price? Hmmm.
Let’s move to geothermal now!