Deepwater Horizon Disaster: Five Years Later

Five years ago today the BP Deepwater Horizon (DWH) oil well in the Gulf of Mexico burst into flames following a blow out. Eleven workers died in the accident and 11 others were injured. Oil and gas gushed out for months from the broken pipe at the floor of the sea. The actual quantity of the spill was difficult to ascertain initially, and estimates ranged from 10,000 to 100,000 barrels per day. After the fact, it was determined that the maximum rate of spill was about 62,000 barrels a day and over the three-month period of the spill, 4.9 million barrels of oil had poured out. Even though this figure is questioned as it is important to the litigation and fines that BP has to pay, the range of discrepancy has narrowed—somewhere between 3.2 and 4.2 billion barrels. Researchers are still trying to figure where most of the oil went, because only about a quarter of amount has been accounted for.

Over 600 miles of the coastline were affected. Fishery and tourism are major industries of the region, and suffered enormous losses. The damage to the environment, to the local flora and fauna, and the destruction of their habitat was catastrophic in scope. There was a marked decline in the population of shrimp, oysters, and various fish, and the concern was that with the loss of much of their habitat, populations of pelicans, turtles, and dolphins would also collapse. People feared that seafood from the region would be contaminated with toxins threatening the industry. In the immediate aftermath of the tragedy the headlines screamed of the irrevocable damage to the fragile ecology of the area—that the place would forever turn into a wasteland.

Now, forever is a very long time. Not to minimize the catastrophe that the DWH blowout was, it seemed to me though that the alarmist response was uncalled for, and it distracted attention from the real restorative work that needed to be done. Deepwater Horizon was only one of several major events in which large amounts of oil were discharged into seas and oceans and these accidents could provide some valuable lessons.

A year following the DWH blowout, I wrote a post about the accident. I looked at what happened after four specific incidents of major oil spills:  Amoco Cadiz, Ixtoc 1, Exxon Valdez, and the sabotage by Iraqi army following the first Gulf War in 1991.  I also noted that about 10 million gallons of oil naturally seeps in the Gulf of Mexico every year. The main conclusion I drew was that as tragic as these events have been for the people and animals directly affected, they also provide a strong testament to the resilience of the environment as recovery of the environment, and that we would expect the Gulf of Mexico to also recover in three to five years.

I have been reviewing many of the articles about the aftermath of the disaster. Some of the noteworthy findings are:

·      The Food and Drug Administration tested seafood from the Gulf of Mexico for contaminants but has found few problems with toxicity.

·      Studies on the fate of the oil show that the oil-eating microbes, which are endemic to the region because of the natural oil seepage, feasted on the oil spill and biodegraded the oil. The sharp increase in the population of these microbes could have reduced the dissolved oxygen and adversely affect other species, but that scenario did not play out.

·      Fish and shrimp populations have rebounded to pre-disaster levels, and the seafood industry has largely recovered. However, oyster harvests have not yet recovered, possibly because of their limited mobility to move to oil-free areas.

·      Tourists have returned to the region bringing with them the anticipated economic recovery.

To be sure there are still many unanswered questions particularly about the long-term effects. The general point I want to emphasize is that as with previous cases of oil spills, nature has once again bounced back. It is not an excuse to be lackadaisical about oil spills. Safety has to be number one on the minds when drilling for oil in the seas, as it should be in many other industrial operations. Safe operating procedures and disaster preparedness have to be constantly improved as new information becomes available. At the same time we should recognize that oil is not an acute toxin and oil spills do not spell the demise of the region. Nature is remarkably resilient, and that’s worth celebrating.

Getting Real About Energy in Cubic Miles of Oil

Today, with plummeting oil prices and news reports of US oil production poised to exceed that of Saudi Arabia’s, there is a perception on the street that there is no energy crisis. Yet just a few years ago, we were all talking about one. Have things changed so dramatically so fast? We paid considerable attention to the energy crisis following the oil crunch in the 1970s, but then oil prices plunged, and public attention waned, and with it the efforts at conservation and improving fuel efficiency of vehicles. However, the underlying situation and the challenges facing us had not changed, and nor have they changed this time. A crisis is a terrible thing to waste, and we seem to be doing it all over again.  I recently spoke about it with Artist Michael Killen.

Meeting the global demand for energy remains a daunting task, and the energy sources we choose to employ will have a profound effect on the lives of billions of people around the world. People have to be involved in making the choice, or the choice will be made for them. For a sustained, informed public debate on this subject, it is necessary to have a common language that is readily understood by the specialist and the non-specialist. A Cubic Mile of Oil (Oxford University Press, 2010) provides a language to talk plainly yet intelligently about energy, and how to assess our future needs and evaluate our progress.

Energy use is essential to our well-being—it is our sustenance. We use it in all aspects of living: growing food, manufacturing, transportation, communication, lighting, heating and cooling, earning our livelihoods, for entertainment, and more. All these tasks require energy, and we derive it from many different sources such as oil, coal, natural gas, hydro power, nuclear fission, and wind and solar power. Unfortunately, energy from these sources is expressed in different and often unfamiliar units, which makes it hard to assess their relative contributions. We use kilowatt hours for electricity, gallons or barrels for oil, cubic feet for gas, British thermal units (btus) or tons for coal, and so on—it’s a veritable tower of Babel! 

Further, each of these units represents a relatively small amount of energy, and in order to express energy use at a global or national scale, we have to use mind-numbing multipliers like millions, billions, trillions, and even quadrillions. To overcome this problem, my colleague Hew Crane came up with the idea of expressing energy units from all the different sources in one large volumetric measure that is commensurate with the scale of global energy challenge and one for which we can form a mental image. The approximately 90 million barrels of oil the world currently consumes daily adds up to a little over a cubic mile of oil in a year, or one CMO. A CMO thus becomes a very convenient unit to express annual global energy production and consumption. Imagine a pool a mile long, a mile wide, and mile deep, and you have a cubic mile. That’s more than a thousand times the volume of a typical sports arena.

In 2013, the global consumption of oil was 1.1 cubic mile. The world consumed an additional CMO of energy from coal, about three-quarters of one CMO from natural gas, and roughly a quarter of one CMO each from hydrothermal, nuclear power, and wood burning, yielding a grand total of 3.5 CMO. All combined, solar, wind, and biofuels produced less than a tenth of a CMO in 2013. How much will we need in the future? That depends on how seriously we take the UN millennium goals for human development. Between 1981 and 2005, China lifted over 600 million people from poverty, reducing the poverty rate from 85% to 16%. Concomitantly, the infant mortality rate declined from 2100 deaths per day to 770 per day. This achievement was made possible by quadrupling energy consumption. 

Global statistics on poverty are stark: 1.4 billion people subsist below the poverty level, defined by the World Bank as living on $1.25/day; infant mortality is 17,000 children a day; 2.4 billion people rely on wood, charcoal, or dung as their primary source of energy, and women and young girls spend more than 6 hours each day collecting fuel and water and completing other chores that deprive them of opportunities for advancement through education and entrepreneurship. Roughly 1.5 billion people have no access to electricity. Even after implementing measures to conserve and markedly improving energy efficiency, it is estimated that annual global energy consumption will have to increase by several CMO/yr to remove the scourge of poverty and to allow all people to lead healthy, productive lives. 

The challenge of supplying energy to the world’s population is really overwhelming. Even at a modest growth rate of 2% per year (i.e., a doubling every 36 years), the world’s energy demand by 2050 will be over 7 CMO per year. As we seek solutions to the energy crisis, we have to ensure they scale to the CMO per year level¾if not, we will just be nibbling at the edges. When you consider what it takes to develop an infrastructure capable of producing even one CMO of energy, it becomes evident there are no easy solutions, and it will take an enormous effort sustained over many decades to effect meaningful change. 

The slide below illustrates how many power plants it will take to develop capacity for producing 1 CMO/yr.  For each resource, it shows the total number of plants and the rate at which they must be built in order that in fifty years we will have enough of them to produce 1 CMO/yr. Because such analyses are highly dependent on the size and availability factors, I have also included those details. The numbers are truly sobering.

In case you are wondering about the impact of continued use of fossil fuels on climate change, please read my post from June 2012, where I discuss the need for a differentiated approach and a focus on things that matter. And oh, did I mention it is also time to seriously look at nuclear again. Speaking of nuclear power, I was recently informed that this unit was also used by President Jimmy Carter, although—being a navy man—his preference was cubic nautical miles!

Cellulosic Ethanol

The hand-wringing and soul-searching that has gone on at the US EPA regarding a proposed reduction in the amount of ethanol to be blended in the gasoline in 2014 is emblematic of a policy based on optimistic projections divorced from reality.

It began with establishment of the Energy Policy Act (EPACT) of 2005 with the desire to reduce the US dependence on imported oil and to reduce emissions of anthropogenic CO₂. Ethanol could be considered a “carbon-free fuel,” since its combustion would only be emitting the CO₂ the plant had used in the photosynthesis process. Ethanol is produced by the fermentation of sugar using yeast. The sugar may be obtained by expressing it from sugarcane, or by hydrolyzing the starches from crops such as corn.

In the US ethanol is produced mostly from corn, and there is an inherent attraction to the notion of growing one’s own fuel instead of importing it. An additional benefit of EPACT was that it provided US farmers with an opportunity to grow a lucrative cash crop and thereby support the farming industry. There was already a movement afoot in the US to eliminate the use of MTBE in gasoline, and using ethanol as an alternate oxygenate provided a straightforward mechanism to increasing the use of ethanol.

The EPACT required that 10% by volume of ethanol be blended into gasoline. The 10% level was in practice at many locations, and was found to work well with the existing automobile fleet. US gasoline consumption in 2004 was about 130 billion gallons a year, and that meant that ethanol production should rapidly increase from the then 3.4 billion gallons a year to about 13 billion gallons. The act spurred major investments in the biofuels industry, and the installed capacity for corn ethanol grew rapidly.

Over the next few years it became abundantly clear that production of corn ethanol required substantial quantities of fossil energy: fertilizers to grow the corn, diesel for the tractors and other farm machinery, and natural gas or coal for the distillation. Depending on the specifics of the farming practice and processing details the energy return on fossil energy invested (EROI) was found to vary between 0.8 and 1.5, which meant that corn ethanol hardly added to the total pool of energy, although it did provide a storable liquid fuel. Likewise, studies on the life-cycle emissions of CO₂ from using corn ethanol showed that CO₂ emissions could range between 0.7 and 1.3 times that of petroleum-based gasoline. In other words, greenhouse gas emissions could be marginally better or somewhat worse than petroleum, a far cry from the promise of being a carbon-free fuel. Moreover, production of corn ethanol competed for the land and water resources used for growing food or feed, and thus contributed to increasing food prices.

Ethanol can also be produced from lignocellulosic materials, and life-cycle analyses showed that cellulosic ethanol had a markedly lower carbon footprint and a more favorable EROI. The estimated availability of a billion tons of sustainably harvested lignocellulosic materials such as agricultural and forestry residues raises the potential for producing over 200 billion gallons of ethanol, sufficient to displace all gasoline consumed in the US.  

The Energy Independence and Security Act of 2007 (EISA) tried to aggressively promote the development of cellulosic ethanol by setting new standards for renewable fuels (RFS 2). Under it the total volume of biofuels would be steadily increased to 36 billion gallons a year by 2022, which would correspond to 25% of the projected gasoline consumption. The larger fraction of blending would also require more flex-fuel vehicles that could operate with 15% or more of ethanol. To limit the potential conflict of food versus fuel and other negatives of corn-based ethanol, no more than 10 billion gallons of corn-based ethanol would qualify under RFS 2. Most of the rest would be made up by alternate biofuels, notably 16 billion gallons of cellulosic ethanol. Commercial production of cellulosic ethanol in 2007 was in its infancy. The dramatic increase in the production of ethanol, from essentially zero in 2208 to 16 billion gallons by 2022, as envisaged under EISA is illustrated in the graphic below from the Energy Information Administration. 

 

The question before the EPA was whether to increase the mandate of ethanol as required by EISA, or to propose a cut to it in face of the reality. It issued a draft rule last November to cut the mandated volume of biofuels and opened it for public comment. The EPA has received more than 340,000 comments, and although it has made its final recommendation, as of this writing (Nov. 4, 2014) the final ruling has not been announced. Despite that, the mere announcement of possible cuts led to a drop in the price of corn, and many commentators hailed it as a win for Big Oil over Big Corn. However, the important issue is whether the nation wins—whether this action will help in achieving the original objectives of reducing dependence on imported oil and reducing CO₂ emissions.

Given the very limited benefit of corn ethanol and the potential to do environmental harm and raise food prices, EPA had already capped its use to 10 billion gallons. The corn ethanol industry is lobbying hard against any cut back and also promoting the use of higher blends of ethanol. In the absence of cellulosic ethanol, that demand would be met by corn ethanol. Because the installed capacity of all the plants in the US already breaches the blend wall of 10%, higher blends will have to be permitted. The auto industry is opposed to the idea because higher percentages of ethanol in gasoline are not compatible with the fuel storage and delivery systems and could cause engine damage, and there are too few Flex-Fuel vehicles that can use the high ethanol blends.

The only reason for the EPA to stick to the RFS 2 mandates would be to keep the pressure on the advanced biofuels industry, but the installed capacity for cellulosic ethanol is so low that the law would end up penalizing gasoline vendors for non compliance with when there is no way that could comply. In any case, there is no justification to increase the use of corn ethanol.

Increasing Oil Reserves and Peak Oil

In public lectures that I give about global energy, I often note that since the writing of A Cubic Mile of Oil the global reserves of oil have increased, not decreased, despite the fact that in the intervening time (i.e., between 2007 and 2013) the world has consumed about 7.5 cmo. In this post I want to dig deeper and look at the changes that have brought about this paradox, and what it means for Peak Oil.

As I explain in the book, reserves have a special meaning refer to those geologic accumulations that can be economically extracted with the current technology. With the development of technology and/or changes in the price of oil, geologic accumulations that were once only part of the larger resource base may get transferred to the reserves. Focusing only on the reserves is apt to give a wrong impression about the total availability of oil. The chart below shows the historic data for the World Proved Reserves (blue line) from the 2014 edition of the BP Statistical Review of Global Energy (BP2014) .  Using the right ordinate I have also plotted the Reserves to Production rate (R/P) ratio (brown line). This ratio has the units of years, and it has often been mistakenly interpreted as the years to exhaustion.

Likewise, current price of oil largely reflects the immediate surplus or shortage of supplies, and reflects more on the conditions above ground (in the supply chain) than on the geologic endowment of the resource.

That said; let’s begin by taking stock of how the world reserves of oil have changed in the last seven years. According to BP2007 world reserves of petroleum in 2006 stood at 1,208 billion barrels (45.6 cmo), and that’s the number I used in the book. The BP2014 edition lists the 2006 reserves at 1,364 billion barrels (51.5 cmo), and the 2013 reserves at 1,688 billion barrels (63.7 cmo). The upward revision of 156 billion barrels for the 2006 reserves resulted largely from reclassifying about 160 billion barrels of Canadian tar sands from the category of unconventional resource to the reserves pool. Although production of synthetic crude from tar sands had already begun to be commercialized, BP did not include them in the World Total of oil reserves until 2009. To a large extent the reclassification was aided by the maturing of the technology, and also by the rise in the price of oil. In 2006 oil was selling at around $40/ barrel, and that price was barely enough to make Tar sands operations economical. By 2009 had already spiked to above $140/barrel; since 2010 it has been hovering around $95±10/barrel. Smaller upward revisions were also made to the reserves of Venezuela and the Russian Federation, while there was a downward revision of the Kazakhstan reserves (ca. 30 billion barrel).

The increase of 324 billion barrels in the global reserves between 2006 and 2013 as listed in BP2014 edition is largely due to Venezuelan oil. The heavy oil in the Orinoco Belt was very uneconomical to produce, but has been less so since 2009 and the reserves in the Orinoco Belt have increased by over 220 billion barrels (8.3 cmo). Iraq, Iran, and the US have also registered increases in the reserves of 35, 19, and 15 billion barrels respectively.  

The shale oil development in the US had received much attention in the media, but it is sobering to realize that its contribution to the reserves has been rather modest (<1.0 cmo). It has, however, had a more profound and immediate impact on the US oil production, which has increased by about 3.2 million barrels/day, whereas the Venezuelan and Iranian productions have each decreased by about 0.7 million barrels/day. Oil production in Iraq, which was close to its low point in 2006 following the Gulf War, did recover and increased production by about 1.1 million barrels/day. Total world production increased by 4.2 million barrels/day, and had the US shale oil not developed the world supply would have been much constrained, and we probably would have seen much higher oil prices.

The recent news of abundant oil supplies has once again called into question the Peak Oil theory. Writing for the Wall Street Journal, Russell Gold recently provided a nice perspective on why peak oil predictions have not come true. I agree with him on most points, but would quibble with him on the role of technology. He ascribes the increased production to the advent of hydraulic fracturing and horizontal drilling, and places faith in technology to provide developments that will unlock further resources of oil. Perhaps just as important to consider is the price change, which responds more to the global demand for the commodity than anything else. Producing shale oil is not inexpensive; the cost can be upwards of $60/barrel. As mentioned above, prior to 2008 the oil price hovered around $40/barrel, and after some spikes it has been above $80/barrel since mid 2009; evidently the global market seems to be willing to pay this high price to support production of expensive oil.

Distinct from geologic and economic limits, which have dominated the Peak Oil debate, is the energy limit. I am referring to the energy return on (energy) invested, or EROI. It takes energy to extract oil, and easy oil—the kind that gushes out of wells can have an EROI values around 100, meaning that for each barrel of oil energy invested, the well produces 100 barrels of oil. Current global average of producing conventional oil has EROI of 20, while the more difficult to extract Alberta tar sands and shale oil have EROI between 5 and 7.

While it is true that oil may still be extractable at higher prices, oil ceases to be a source of energy when the energy required in recovering it exceeds what it can deliver. Now, there still maybe an economic incentive for continuing to produce a fuel from sources with EROI of less than 1 as long as the product fuel provides sufficient value—corn-derived ethanol is a prime example of that. I should note that I was incorrect in the book to say that once the EROI is less than 1, “there will no longer be an incentive to extract it regardless of price.” I should have said that oil ceases to be a contributor to global energy supply when its EROI drops below 1.

My Talk at UUCPA

This afternoon I was invited by the Unitarian Universalist Church in Palo Alto to give a talk on global energy based on A Cubic Mile of Oil. It was great to see many familiar faces and I thoroughly enjoyed the discussion following the presentation. The slides I showed and many more that I held in reserve are available here.

During the Q&A I was asked how CO₂ emissions from electric cars compare with those from a gasoline-powered car if one takes into account emissions associated with electricity production. I responded by saying that in general CO₂ emissions from electric vehicles are lower than those from gasoline-powered cars, but it really depends on the specifics—particularly on the location because grid emissions per kWh vary considerable across the country depending on the fuel mix used to produce the electricity. Here is a link to a NY Times article that I mentioned during the talk. It shows the required fuel efficiency of a car to have emissions equivalent to a Nissan Leaf that is charged in different parts of the country.  As the graphic illustrates, in many parts the country the required fuel efficiency is in excess of 50 mpg, which is higher than the fuel efficiency of even hybrid cars, but in much of central USA, where a larger percentage of electricity is produced from coal, the required efficiency of 35 mpg is easily surpassed by many fuel efficient cars.

Rise of Renewables in Germany

The release of the report Better Growth, Better Climate last week and the People’s Climate March just before the UN Climate Summit this week has focused much public attention on the climate change crisis. The report by the Global Commission on Economy and Climate chaired by the former President of Mexico, Felipe Calderon, and co-chaired the notable economist, Nicholas Stern, provides support to the notion that the actions to mitigate climate change are not expensive and will not even hurt the economy. Many commentators have used this report to buttress their calls for strong action to curb greenhouse gas (ghg) emissions by turning off fossil fuel power generation, stop subsidizing fossil fuels, and using the revenues in alternate ways to help develop clean energy sources and grow the economy.

Writing in the NY Times, Mark Bittman, argues for developing small, decentralized, clean energy sources instead of projects like the Tar Sands and fracking. To further support this approach he refers to Naomi Klein’s book, This Changes Everything, showing Germany’s success in transforming its energy system, "Klein cites the example of Germany, which reached a goal of making about 25 percent of its energy clean and renewable within 15 years..." For the world’s 4^th largest economy to get 25% of its energy from renewable sources would be truly remarkable. Unfortunately, Klein, Bittman, and others have conflated energy with electricity. While Germany now derives 25% of its electricity from renewable resources, these sources amount to only 9% of the total energy consumption.

Through the policy of Energiewende, Germany has made huge progress in installing renewable energy systems like wind and solar. Since 2005, the installed capacity of wind power has nearly doubled, from 18 GW to 34 GW. Solar power has had an even more spectacular rise, from 2 GW to 35 GW. While this is commendable, it also shows how hard it has been to get to the 10% mark in 15 years.

It is instructive to look at the numbers. The 2014 BP Statistical Review of World Energy lists energy use in various countries by the sources. The total energy use in Germany was 325 million tonnes of oil equivalent (MTOE). The contributions of different sources in MTOE units are as follows:

Source	Amount (MTOE)	Percentage
Oil	112.1	34.5
Natural gas	75.3	23.2
Coal	81.3	25.0
Nuclear	22.0	6.8
Hydroelectric	4.5	1.4
Renewables	29.7	9.1

In converting the energy from sources that produce electricity directly, the BP compilation does not use just the energy equivalence (1 MTOE = 12 MWh), but allows for inefficiencies of thermal power sources and uses 4.43 MWh as the equivalent of one MTOE.

The International Energy Agency (IEA) also compiles data for various . Its data for Germany summarized in this one-page overview also confirms that renewable resources make up 11% of Germany’s primary energy consumption, and about 25% of its electricity production. Before we get too excited and attribute the 25% electricity to the rise of wind and solar installations, lets take a look at the breakdown provided by the IEA. About of half the renewable electricity comes from biofuels and waste (9%) and hydroelectric (3%); the remaining 14% are from wind (9%) and solar (5%).

Figure: Electricity generation in Germany, 2013: Renewables provided 25% of electricity, while coal still dominated with 47% and nuclear produced 15%.

The challenge of providing cubic miles of oil worth of affordable energy so people can lead healthy productive lives while curtailing greenhouse gas emissions to levels that make an impact remains wickedly tough. Cheer leading alone will not get us there; commitment and persistence are the watchwords.

Another trip around the sun

Last Monday, June 16, BP released its Annual Statistical Review of Global Energy, and it is an opportune time to gauge the progress made on the energy front. I am commenting on some salient bits that jumped out at me at first glance.

Total Energy. Primary energy use climbed another 2.3% in 2013, bringing the total to 3.7 CMO.  This value includes an estimated 0.3 CMO from biomass that is not covered in the BP reports. In Chapter 4 of the the book, A Cubic Mile of Oil, we had looked at various scenarios for future energy demand spanning several growth rates. Global energy consumption has been following the high-growth business-as-usual (BAU) scenario trajectory, which, if continued, leads to an energy consumption rate of 9 CMO by 2050.

Figure 1.  Energy growth scenarios.

The world has been implementing many measures to increase energy efficiency—light bulbs, appliances, automobiles, power stations etc. Nevertheless, since 2000, except for a temporary dip following the economic crisis in 2008, global energy consumption has continued to rise at. As we had pointed out, the BAU growth rate was based on the historic data since the 1960s; it subsumes a certain level of consistently improving efficiency. Thus, if we wish to bend the growth curve down further, we will need to redouble our effort to increase efficiency in everything we do. While the trend line has clearly diverged from the scenario corresponding to the 1.8% growth, it is still not too late for the future energy consumption to follow the green trajectory we had labeled “variable profile.” The good news is that global CO₂ emissions from energy use increased only 2.1% to 35.1 Gt while energy use increased by 2.3%; global GDP increased at an even faster rate of 2.7%

The increase in a tenth of a CMO was made up by increases of 0.01 to 0.02 CMO in all the different sources of energy: wind and solar, hydro, coal, oil, and natural gas. Only nuclear energy remained flat.

Electricity.  Total electricity production, which comprised 36% of total primary energy, has grown to 41% in 2013. The increasing contributions wind, solar, and geothermal sources are shown in Figure 2. For perspective, the figure also includes a line corresponding to 2% of total electricity generated in each year. The sum total of solar, wind and geothermal exceeds 5% of the global electricity generation, with both wind and geothermal exceeding the 2% level.

Figure 2.  Electricity generation from wind, solar, and geothermal sources.

As wind and solar installations continue to get cheaper they become the preferred choice for new installations in more markets. The cost of solar panel has already fallen to about $0.70/Watt, but the total cost of installation is still above $4/Watt. Rightly so, greater attention is now being paid to cost of other components, including permitting and installation. We can hope that these costs continue to decline and make PV affordable for the utilities and their customers. Nonetheless, it is a long road to reach the scale of a CMO/year.

Oil Production. In previous posts (March 10 and Oct. 15, 2013), I had commented on the increasing oil production in the US. I was particularly surprised by the projection by the IEA that the US oil would soon surpass that of Saudi Arabia. Yes, there had been a recent uptick in the US oil production, but in 2011 the Saudi production exceeded that of US production my more than 3 million bpd. While this gap could be bridged in a few years, that would require a massive investment, which I had not seen, and also it would depend not only on US production, but also the response of Saudi Arabia to the rise in US production.

The figures in the latest BP Report show that the gap between the US and Saudi production has indeed narrowed.  In 2013 it was down to 1.5 million bpd. Here is the updated figure of the US and Saudi oil production and consumption. Incredulous as I was then of the IEA analysts, I am beginning to feel that they had done their homework and looked at not just the past production numbers, but also the investments made for projects that were already in the pipeline.

Figure 3. Oil production and consumption in the US and Saudi Arabia.

Writing this post reminded me of the time I was asked, back in 2008, if the US could replace all its coal-generated electricity with that from “green source” in ten years. Here is a short, 3-min video clip from that event.