Emerging Visions of the Future

There were crossovers of opinion and these descriptions are not all inclusive. One oil company executive, Ali Samsam Bakhtiari, Ph.D., of the National Iranian Oil Company, was firmly in the Peak Oil camp and he presented startling figures on oil depletion in Iran as well as analyses that showed that Saudi Arabia's vaunted reserves of 250 billion barrels (Gb) might be far lower than reported. "Saudi Arabia has already produced 100 Gb out of ultimately recoverable reserves of 260 Gb. It may have less oil and may have passed mid point of production which means decline," he said.

As FTW has repeatedly reported, once a field, a nation, or the planet passes the peak of production, each new barrel produced on the average requires more money and more energy, while at the same time tending to be of declining quality and thus more expensive to refine. Bakhtiari's assessments were supported by other presentations showing that even though 43% of the world's URR may be located in the Middle East their size maybe far less than hoped for and the nations in the region may be actually peaking much sooner than expected.

The sobering numbers tended to reinforce Simmons' position as presented to the Bush administration and debate frequently turned to alternative energy sources. No one at the conference presented any evidence of any combination of alternative energy sources which would replace hydrocarbon energy and no one alleged that even if such a mix was available it could be implemented in time to prevent major economic and human catastrophes.

This writer walked away with the conclusion that as a result of political and economic denial, as the lights started going out, as cars stopped running, as fertilizers and pesticides became too expensive for third world nations, and as famine started to hit the planet, coal and nuclear would be the knee-jerk solutions reached for and that they would not prove to be effective for anything except an immediate finger-in-the-dyke solution.

One conclusion generally accepted by almost every attendee was that hydrogen, contrary to popularly accepted comfort promotions by writers like Jeremy Rifkin, was not a solution either in the near or long term because of intensive costs of production, inherent energy inefficiencies, lack of infrastructure and impracticalities. Speaking for Daimler Chrysler, which paid lip service to Peak Oil yet acknowledged that it had done extensive research on hydrogen vehicles, Dr. Jorg Wind told the conference that his company did not see hydrogen as a viable alternative to petroleum-based internal combustion engines.

"We use fossil fuels to make hydrogen. That does not result in a significant CO2 reduction. We predict that by 2020 only 5% of fuel use will be hydrogen and that infrastructure and the political framework is the most important factor. In order of relevance and likelihood from the standpoint of the auto industry Wind stated that we would see improved conventional vehicles, starter hybrid vehicles, electric hybrid vehicles and, finally, fuel cell vehicles as solutions, but he had little optimism that fuel cells would ever amount to a significant market share. In a telling left-handed acknowledgement of Peak Oil, Wind noted that one third of all diesel fuels currently used in Germany were biodiesel relying on recycled waste and or plant feedstock. He was particularly critical of ethanol stating that it was not energy efficient.

French presenters confirmed that ethanol was only viable in France due to a three hundred per cent government subsidy to farmers. Otherwise it was a net energy waster.

When asked by FTW if Daimler-Chrysler had estimated the costs for infrastructure changes and capital investment to produce fuel cell vehicles Wind stated that the company did not know these costs. The implication was that having evaluated the technology involved in the vehicles themselves the company didn't consider it worthwhile to undertake further financial evaluation.

Wind elicited groans from the audience when he asserted that everything was customer driven and that corporations bore no responsibility for the shortage of practical solutions to the looming crisis.

"It may not be profitable to slow decline"

Dutch economist Maarten Van Mourik of the Netherlands Economic Institute delivered some chilling facts and then offered perhaps the most memorable quote of the entire conference.

He had little hope for deep sea exploration, stating that deep water non-conventional oil would represent only five per cent of world supply by 2020. Ultimately it would produce only about 5 Gb. The world is currently consuming a billion barrels of oil every twelve days. "It is way too expensive. The cost is fifty to sixty million per rig and there is little guaranteed return." He noted, not surprisingly, in view of recent developments in the "war against terrorism," that West Africa was the best deep water oil prospect with Angola being the most likely candidate for new activity.

After looking at more of the various alternatives, Van Mourik revealed an underlying truth that is certain to exacerbate the effects of Peak Oil, "It may not be profitable to slow decline."

Hydrogen's Lead Financial Balloon

Pierre-Rene Bauquis, Vice President of the French Energy Institute, associate IFP professor and former special advisor to the president of TotalFinaElf, confirmed prior research by FTW citing hard scientific data showing that hydrogen is not a practical solution. As a member of Environmentalists for Nuclear Energy he made no secret of his advocacy of nuclear power. And it is quite probable that if Total or any other oil company could make a profit from hydrogen they would rush to do it, especially since they know that they are running out of their current product.

Noting that one half of all oil is used for transportation, Bauquis insisted that renewable energies sources would not solve the problem and stated flatly that "Hydrogen is not the fuel of tomorrow." He noted that the first internal combustion engine, built in 1805, was a hydrogen engine and that it was quickly discarded because of the problems hydrogen poses with transportation, storage and efficiency.

Bauquis observed that, "Commercial production of hydrogen is two to five times the cost of the fossil fuels used to make it. Transportation is impossible. It is two times as costly to transport hydrogen as it is to transport electricity. The storage costs for hydrogen are one hundred times the cost of liquid petroleum products."

He was equally unforgiving when it came to ethanol. "To replace forty per cent of the oil in use you would need three times the currently available farmland just for feedstock."

Bauquis drew some groans from the audience when he insisted that the "Chernobyl" disaster was a hoax perpetrated by Green Peace which had grossly exaggerated the number of deaths resulting from the 1986 nuclear accident but his observations about hydrogen are consistent with a wide number of scientific studies from a number of differing political and economic interests. He did acknowledge that perhaps in several decades, so-called green or white hydrogen (produced by electrolysis rather than from methane) might become feasible but only as a result of nuclear energy to power the conversion process.

One audience member elicited boisterous audience laughter by asking another presenter, "Now we have one situation in the market in which we get conventional fuel, namely oil, we burn it in a combustion engine, and we do work._ Now what I understand the hydrogen defendants are promoting, led by Mr. Jeremy Rifkin, is a hydrogen economy consisting basically in getting the conventional fuels again and producing alternative/solar energies or clean energy… or a wind generator …to produce electricity to then split the water molecules into hydrogen and oxygen and then compressing the liquefied hydrogen for transportation and storage and then injecting the hydrogen into the fuel cell to produce electricity to do work in the machine._ Do you really believe that this is efficiency?" ________

Russia's Got Gas

J. Peter Gerling, head of the Energy resources section of Germany's Federal Institute for Geosciences, after repeating that worldwide reliance on oil and natural gas was increasing rather than decreasing, observed that Russia has an estimated one-half of all the estimated ultimately recoverable reserves of natural gas on the planet. The tiny nation of Qatar, where the US has located its Central Command headquarters, has more natural gas than North and South America combined. This does the US little good for the time being until massive LNG tanker fleets and infrastructure are built but it goes a long way towards explaining why Paris and Berlin have been slowly forming an economic partnership with Russia. It also explains why experts like Colin Campbell believethat the UK will ultimately join the European Union. Chris Skrebowski of the UK's Institute of Petroleum had previously noted that by 2007, Britain will be in its second year of gas imports and its first year of oil imports, the once proud North Sea fields having been nearly depleted by that time.