If by emitting carbon dioxide from millions of cars, factories and power plants, we are affecting the very temperature of the world around us, exacerbating the intensity of storms and hurricanes, and melting the polar icecaps, it makes sense to consider what we might do about that. In the U.S., where massive efforts are underway to rebuild areas devastated by the recent hurricanes, winter looms, along with natural gas shortages that are predicted to cause wild upswings in domestic prices. What can be done to reduce this reliance upon imported oil and gas? What time scale are we talking about, and what will it cost?

Dr. Robert L. Hirsch, a Senior Energy Program Advisor for SAIC, recently headed a research study performed for the U.S. Department of Energy’s National Energy Technology Laboratory, which looked at the mitigation strategies that would be necessary if the U.S. were forced to reduce it's reliance upon imported oil due to a peak in world oil production. This report, which is available on the internet, is so chilling in its conclusions that the author felt to comment that "...the world has never faced a problem like this. Without massive mitigation at least a decade before the fact, the problem will be pervasive and long lasting."

Why? Dr. Hirsch believes that in the case of a world oil production peak, and an inevitable decline in production, we would face a "liquid fuels" crisis. And it is the sheer size and scale of this challenge that is so daunting. Indeed, Dr. Hirsch concluded that it would require a twenty-year crash program to avoid severe economic consequences. "The reason why such long lead times are required is that the worldwide scale of oil consumption is enormous – a fact often lost in a world where oil abundance has been taken for granted for so long. If mitigation is too little, too late, world supply/demand balance will have to be achieved through massive demand destruction (shortages), which would translate to extreme economic hardship. On the other hand, with timely mitigation, economic damage can be minimized".

We saw a little of this dermand destruction during the recent oil shocks, although prices did not reach the historical highs of the early 1980s. If petrol prices rise high enough, people conserve or cut down on driving – economists call this demand destruction. Petrol prices have since fallen somewhat, due to IEA exports to the U.S. from Europe, but diesel fuel pricea are still high, putting the pressure on farmers, food prices and construction/reconstruction costs. Dr. Hirsch did not focus on "when" a world oil peak may occur, as there are a number of predictions, ranging from 2005 to 2040. Rather, he concentrated on the technologies that are commercial or near-commercial and could be employed immediately. These included:

1. Fuel efficient transportation,
2. Heavy oil/oil sands,
3. Coal liquefaction,
4. Enhanced oil recovery,
5. Gas-to-liquids.
 

He did not include the widely hyped hydrogen option, as there are few hydrogen cars, few hydrogen production plants, fewer fueling stations and no large-scale hydrogen distribution system. He did note that technologies such as this would "...undoubtedly prove very important in the longer-term future, but they are not ready now, so their inclusion would be strictly speculative".

Dr. Hirsch then analyzed the scale of the effort that would be required, depending upon when that effort was undertaken. He looked at the three following scenarios and calculated their consequences. I have listed his conclusions immediately following the date of mitigation initiation.

1. When peaking occurs
"Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades."

2. Ten years before peaking occurs
"Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked."

3. Twenty years before peaking
"Initiating a mitigation crash program 20 years before peaking offers the possibility of avoiding a world liquid fuels shortfall for the forecast period."

It should be noted that these predictions were based on "crash program implementation worldwide – the fastest humanly possible", and that Dr. Hirsch has not allowed for any additional efforts or investments into alternative transportation schemes, such as improving the rail network or looking at electric-powered cars. Any efforts such as these would be "in addition" to his crash program implementation...

So, when should we worry? Let's take a look at some of the predictions of a world oil production peak, from the experts.

Even based on the rosiest of the predictions above, only in one case do we have the twenty years that Hirsch says we require to overcome the worst consequences of this problem. In all of the other cases, we do not have the time to react without, according to Hirsch, "considerable discomfort or worse". The recent oil shortages were only a glimpse of what could come. Instead of high prices for a short time, a world oil peak would usher in high prices for the medium to long-term future.

What lessons have we learnt?

It seems that it is human nature to ignore a problem until it is a crisis. Nowhere is this more true than in politics and industry. While oil is cheap, people are happy to guzzle the gas and buy SUVs, and the politicians are happy to oblige, as it leads to happy car companies willing to help fund political parties. When there's a problem, and prices rise, suddenly everyone is concerned. Just as suddenly, the car manufacturers start getting serious about hybrids, and start downsizing their cars. But it seems to take a crisis to start them thinking seriously.

The really bad news is that Dr. Hirsch's study only scratches the surface of a much larger problem. We currently have no economically cost-competitive alternative to oil, gasoline, diesel and natural gas. There is nothing that is remotely ready to be rolled out, and even if it was, it would cost "in addition" to the massive mitigation program that Hirsch has considered. It remains to be seen whether the world can afford to fund these dual efforts to secure our energy future, without a worldwide economic depression.

Dr. Robert L. Hirsch is a Senior Energy Program Advisor for SAIC. Previous employment included executive positions at the U.S. Atomic Energy Commission, the U.S. Energy Research and Development Administration, Exxon, ARCO, EPRI, and Advance Power Technologies, Inc. Dr. Hirsch is past chairman of the Board on Energy and Environmental Systems at the National Academies. He has a Ph.D. in engineering and physics from the University of Illinois.

References:

The Inevitable Peaking of World Oil Production - Dr. Robert L. Hirsch (PDF)
The SAIC Peak Oil Mitigation Report - Dr. Robert L. Hirsch (PDF)
The SAIC Peak Oil Mitigation Report - Dr. Robert L. Hirsch (Word)
Address to National Academies Workshop on Oil Supply - Dr. Robert L. Hirsch (MP3)
Address to National Academies Workshop on Oil Supply - Dr. Robert L. Hirsch (RealPlayer)