[ed note: I am putting this up without the bells and whistles (links, etc.), and with perhaps a few typos. I’d rather get it up in a timely fashion and return to it to correct any mistakes. Comments are welcome and appreciated by those that can clarify or rebut my recollection of the events.]
ASPO Day 1:
Our first day of ASPO started out with a tour of Old Sacramento, followed by a chance meeting with a board member of an upstart Extended Oil Recovery (EOR) firm called Titan Oil Recovery. He described their revolutionary technique to bring life to mature oil fields, involving the Titan process which causes microbes found in the well to multiply and break down the size of oil particles trapped in rock to a small enough size to allow them to flow, increasing total recoverable crude from the well, and causing a rapid increase in production. My opinion, keep an eye on this company. If they can really do what their data showed, it my be a game changer for production in mature fields.
The conference itself began with two sets of three breakout sessions. I attended the “Reporting the Oil Story” session, while Dr. Hall attended the first of two presentations by the writers of the The Oil Drum, and David attended the “Investing in the New Energy Economy” session.
My session consisted of individual presentations by a media panel that included Neil King from the Wall St. Journal, Erica Anderson from the San Francisco Chronicle, and Bart Anderson from the Energy Bulletin. John Theobald, From UC-Davis, moderated the session. I enjoyed the history of the progression of the peak oil movement from its meager beginnings on the web toward articles in major newspapers and mentions on the nightly news. The major discussion within the group was how to help shape the message on peak oil, and to increase coverage of “the most important issue facing our nation and the world.”
Some interesting quotes and ideas from the speakers:
Neil King from the WSJ noted that the peak oil picture is like a “pointillist painting” where all sources are reporting on the issue and “adding their dots to tell the whole story (MSM, blogs, technical, etc.) He also noted that there is a willful blindness to the energy depletion issue by the media, leaders, etc [I need to listen to this and get it right]. Another important point is the apparent disconnect in writing on energy, comparing a Barron’s article titled “The Good News About Oil” which reported that decreased oil prices with allow increased GDP growth – to a WSJ Article “New Turn Around in Oil Price Not All Good News” which reported that decreased oil prices make unconventional oil projects like oil sands unprofitable as they now require $100/barrel prices to support continued operation. “$85/barrel on the way down, is not the same as it was on the way up.”
EE complained about MSM coverage to date on peak oil. Noting importantly that there has been no call for accountability of our leaders. “The government has been on notice for decades, but has done nothing about our dependence. No one is covering the accountability issue.” She also appealed to journalists to ask the tough questions, ones that “get questions asked higher up the food chain” and increase the awareness of decision-makers. She finished with how concerned citizens, bloggers, and reporters can increase coverage of peak oil, including: emailing the ombudsman of your local paper, writing to the alumni magazine (especially if there is energy work being done at your university), expanding education of black and Latino populations, a stealth approach going after the pundits that regularly appear on news and talk programs – convincing them to speak about the issue, and lastly, when you see a good article, don’t just bookmark it, send it to contacts and elected officials.
Bart Anderson from Energy Bulletin noted that traffic increases correlated to energy prices, however, despite rises and falls in energy prices the overall trend is up. He gave a good overview of media coverage from the beginning of the peak oil movement, where two people on volunteer time could find all the articles on oil and energy, to currently, where there is “too much information to keep up with”. Speaking about what the peak oil movement has done right, we have many volunteers doing research and writing, in a fairly non-partisan and welcoming atmosphere, with a ton of stimulating content. He describes peak oil blogging and writing “like a ongoing graduate seminar.” The problems we face: it is mostly a volunteer effort where people burn out, we’re limited to informing and persuading, and most who are interested in the issue have a technical orientation – and a lack of diversity.
The next section that I attended was Analyses from the Oil Drum (Section II), which included stirring presentations from Robert Rapier, Jeff Vail, and Brian Maschoff (sp?) (Jules Verne).
Robert Rapier discussed energy information sources that he uses to do his analyses and their pros and cons. As a graduate student, this was very relevant information. Like others he railed against the optimism of the EIA in their forecasts, but does use this public information source for their weekly petroleum status report, as a source to debunk statements made by public officials and the media, and for tracking current gasoline stocks in the US. He avoids their poor price forecasting, and notes that it is a travesty that business and the government make decisions based on this data. Robert uses the IEA for their current estimates of world oil production, and world refining margins as a way to understand supply and demand risks. He also mentioned CERA as a source that he tends to avoid, but does note that they have traded their rosy production forecasts for more pessimistic ones beginning in 2008. Other sources include BP Statistical Review of World Energy and Platts.
Jeff Vail gave a very interesting presentation on the System Approach to the Geopolitics of Energy. You’ll have to forgive my brief review of a well thought out idea – I would like to look further into the concepts he presented. Important in the systems approach is that people use the “first best” energy principle in finding new sources of energy, as well as when reducing demand. The elastic demand is reduced first, leaving a progressively inelastic system over time. Our geological challenges in energy production will increase our geopolitical challenges to the production, export and use of that reducing energy supply. He also noted that there is tension between the state and national level over oil supplies – as in Nigeria, where certain traditional areas contain most of the oil supply, but the benefits from that extraction are shared over the entire nation. The profits increase with the price of oil, but the revenues per capita are decreasing due a rising population. This has led to resistance and strife in that nation. His overarching theme is, “the right side of the Hubbard Curve will look much worse than the left, due to geopolitical feedback loops.” He believes that the most important point on the curve is not the geological peak production, but the point at which the increased supply increase changes to a decreasing supply increase – a point we’ve already passed. My apologies to Jeff for a cursory review of a very deep topic.
Brian Maschoff “came out of the blogging closet” so to speak at this years ASPO-USA conference. He is better known at The Oil Drum as Jules Verne. His presentation was on using Google Earth to track the number, location, and future position of drilling rigs around the world. This concept was so foreign to me, that after he explained it, I realized the power that thousands (millions?) of eyes able to view our planet through satellites may have. While, that might not be my personal cup of tea (I have enough internet addictions…) it is amazing what outside of the box thinking like this can add to the information available to the general public. I can only imagine what Brian could do working with the satellite information that the NSA or CIA has.
The evening session was a presentation by Peter Wells – OPEC Dilemmas, Issues and Responses. Peter’s studies on peak oil funded by Toyota, and it was noted in his introduction that Toyota understood the implications of the end of cheap energy would have on their business model and 6 years later the Prius came out.
Peter gave a well-reasoned presentation based on a model that his agency uses to predict changes in global oil production and discovery. While his predictions are based on a higher availability of current reserves and an increased discovery level than other speakers, his modeling technique was similar to Jean Laherrere and Colin Campbell, where individual fields are projected for production and discovery and then combined into a world oil forecast. He calculates the decline rate for those individual fields, based on geological data (from the IHS data – unavailable to the general public). Many present questioned his assumptions about reserve levels and growth, but it was difficult to disagree with his conclusions about the continuing shift of power from Non-OPEC (which peaked in 2008) to OPEC countries that contain 90% of the world’s remaining oil supply.
Other interesting comments from Peter:
– Enhanced oil recovery (EOR) will begin in Northern Ghawar within a “couple of years” (a sure sign of the decreasing health of the world’s largest oil field)
– Iran is increasing supply, and will peak at 5.5 Mbpd
– Iraq has the potential to produce 5 Mbpd
– World crude oil predicted to peak in 2015, world liquids in 2020. He believes that the crisis will start in 2015
– His model predicts a 8% non-OPEC decline rate
– Net exports will continue to decline due to rising per capita use in producing nations
By my accounts, Day One was a great success. I wish that I could have attended more of the breakout sessions. They all seemed extremely interesting to me. I also wish that I could retain all of the information that I am receiving. As Dr. Hall put it, “it’s like drinking from a fire hose!” (Later, Megan Quinn put it just as appropriately, “it’s more like drinking fire…”) The networking and discussion going on in the hallways of the hotel is on par with the presentations going on inside the conference rooms. More on days 2 and 3 coming as soon as I get a break!
[UPDATE: I ranted about the hotel last post, but want to say what an excellent job they have done at the conference. The food, coffee, and general flow of the conference has been great. A testament to the organizers, the volunteers and the hotel staff.]