The End of the Oil Age Gets Postponed Again. Really?
It looks like we have to wait a little more to see the end of the oil age. Our desire to burn more and more stuff knows no limits — at least not when talking about the foreseeable future. Statements like “oil will be needed for at least another 10 years” or “independent experts agree that global oil and natural gas demand will increase over the next 30 years” suggest that transitioning to ‘renewables’ will have to wait a little. Will we burn as much carbon as we see fit then? Well, as usual, reality will have a thing or two to say in the matter.
Up until the war in Eastern Europe broke out and a wast array of sanctions were unleashed on one of the world’s biggest fossil fuel supplier, the ruling meme on how the oil age would end was called ‘peak oil demand’. According to this myth, pushed by mainstream media, ‘progressive’ oil companies and high tech automakers, we would eventually reach a peak in fossil fuel consumption as we seamlessly transition into an electrified road transport powered by ‘renewables’. Demand increase for oil would thus stop at some point in time, then start to fall gently like a feather on mom’s belly. The climate would be saved, meanwhile everybody could keep on shopping and consuming happily as if nothing happened.
British Petrol (or BP for short) has famously put this ‘peak demand’ date into 2019 — a forecast they would quickly backtrack two years after. A couple of more years into this brave new world, and after years of unprecedented shortages, the world has started to realize that fossil fuels might indeed be needed for a while down the road.
The myth of peak demand has not been slain though. It just got itself a decade of shelf life extension — keeping us on the wrong track and giving us a happy ride on the hopium train. The very inconvenient reality, this myth prevents us from seeing though, is that effectively ALL of our energy (including nuclear, solar, hydro and wind) comes either directly from (or depends hopelessly on) fossil fuels in general, and on one type in particular: oil. Mining, heavy machinery, long distance transport — without which there is no ‘renewable’ or nuclear future — simply doesn’t work without oil and its most valuable derivative, diesel.
As someone working in an automotive engineering firm’s electrification department, I got to know the limitations of what is technologically possible quite intimately. Trust me, there is no magic potion brewing in our cauldron here. We are pushing a hundred-year-old technology to its very limits by adding ever newer and ever more exotic materials, hyper-complex technologies and an ever increasing amount of engineering hours… All of which are hitting diminishing returns, while remaining predicated on the ceaseless availability of oil to fuel and keep our six continent supply chains alive.
Besides that petroleum provides feedstock to many essential components in electric vehicles (from plastics to ‘rubber’ and from paint to resins) — not to mention the asphalt on which those cars and trucks roll. All of these materials we take for granted are cheap and abundant only because we haul up 80+ million barrels of oil every day. Plastics, and the many other materials we derive from petroleum, are byproducts of fuel distillation and their ratio to diesel and gasoline is pretty much fixed. Should thus oil production fall, we would soon face scarcities and price increases on all these fronts as well. Be careful what you wish for. You might just get it.
Now, from a purely technical perspective, is it possible at all to get rid of diesel fuel, and to electrify road transport? If you ask my personal opinion: not a chance. Batteries are inherently heavy and bulky things with a very low energy density — making them a really bad choice for powering heavy duty equipment (1).
In fact, batteries store less then a fifth of the energy per pound compared to what a same amount of potatoes— yes, dumb uncooked potatoes — contain.
Knowing all this many pin their hopes on hydrogen, but those who are intimately involved with the physics of this technology (and I’m not talking about nuclear scientists, this can be understood by laymans as well, if explained understandably, really) see how impossible a challenge it is. Of course, as long as money from governments and investors led down the garden path keeps flooding into the development departments of engineering firms, the hydrogen myth will be pursued and newer and newer test vehicles will come out… Only to be forgotten in a day.
Hydrogen in essence is an impractical, but highly explosive battery, the components of which can be transported separately from each other. If you understand it as such, you immediately start to see the losses in the system from hydrogen generation, to compression, cooling, transportation, refilling etc… Not to mention the special and very expensive storage tanks and fuel cells, made from rare and expensive materials like platinum, needed to make all this magic ‘possible’…
Hydrogen is not a resource, but a spectacular way of wasting energy.
Unlike coal or oil, hydrogen is not available in its pure and elemental form in nature. You have to invest energy and scarce metals into separating it from other elements like oxygen, then suffer all the losses described above, only to turn it back into water — hoping that you will get something out in the form of useful work in the end. This whole process is giving you back roughly one quarter of the energy, compared to what you put into generation at step 1 — without taking into account the vast amount of energy and resources needed to build and maintain such a system. For example if you have got a 100 kWh-s of electricity from your solar panels in the Sahara, you get roughly 25 kWh-s back in form of electricity moving your truck from point A to B in Europe. Good luck using that little portion to build out then maintain the whole system, let alone an entire civilization.
From an energetic, storage and conversion perspective Hydrogen is totally uncompetitive with diesel, and this has nothing to do with a malevolent fossil fuel lobby or evil cabals, only with pure physics. No wonder it never made a brake-through in the market despite many decades of development and billions of dollars spent on the hype around it.
The future of this high tech industrial civilization, so dependent on transportation and heavy duty machinery used in mining, agriculture, the industry, construction and so on, thus all boils down to the availability of oil (not to mention the literally thousands of materials derived from it). Lacking any meaningful alternatives, there can be no such thing as peak oil demand. What we will observe on the other hand is peak affordability, which is a totally different kind of animal.
Oil is the essence of this civilization. If there is ever a peak to it, it would mean peak civilization as well. Understand this and you understand everything else going on around the world.
We will use petroleum as long as we can pay for its extraction. If that becomes increasingly unaffordable, then the flow oil will simply wane, leaving much of the black goo underground in inaccessible, remote and inconvenient locations. This way we will never run out of it — we will simply become unable to get it.
The myth of infinite technological progress, and thus our ability to decouple ourselves from oil, must be uphold at any cost though. Peak oil demand starts to lose its appeal in face looming supply shortages and the obvious difficulties coming with it. So the rather gloomy message of us running out of affordable oil needs to be sold to investors, policy makers and the public in a more palatable way... Wood Mackenzie duly came to the rescue by painting our oil predicament green, ‘re-framing’ the question as „low emission” vs “high emission” oil. Nice.
Scratch the green paint on this inherently polluting and climate wrecking fuel though and you immediately discover cracks in the myth. Knowing that oil gets drilled, pumped then delivered by using oil, the message, that “global reserves of both low-cost and low-emission oil and gas stocks are dwindling” translates into an admission that “we are running out of the easy to get oil, and what remains requires ever more energy (i.e. burning more carbon) to extract”. Seen in this light, the finding from Wood Mackenzie correlates perfectly well with the study I wrote about last April. As the original authors concluded in 2021:
“The total energy needed for the oil liquids production thus continually increase from a proportion equivalent today to 15.5% of the gross energy produced from oil liquids, to the half in 2050. We thus foresee an important consumption of energy to produce future oil liquids.”
So much for peak demand. Even supporting a mild decrease in the end use of petroleum products — as envisioned by peak demand acolytes — would still require a growing amount of the black gold to be brought to the surface, to compensate the accelerating energy demand growth of drilling. By 2050 — according to current estimates — half of the natural gas and fuel coming out of wells and refineries would have to go back to the machinery operating on the oil fields: the floating rigs, the ships and helicopters serving them, or onshore the thousands of trucks carrying the equipment, sand and water for drilling and so on.
Of course oil companies will try to prevent this from happening, by installing solar panels and wind turbines to power as much of the equipment as oil- and gas-free as possible (as well as to collect green credits for their efforts made at *ahem* ‘saving the planet’), but this approach has its own limits too. Primarily it is due to the intermittency of ‘renewable’ electricity, but one must not forget about the immense resource requirements of ‘renewables’ in form of copper, metallurgical grade silicon, rare earth metals, steel, concrete and so on — all which need to be extracted, transported and then built and maintained by diesel guzzling machinery. Back to square one.
Will the overall fuel consumption of drilling (and consequently the emissions released by it) decrease as a result then — as proposed by Mackenzie and friends? For a while I suspect yes, but the relentless rise in energy demand for continuing operations will get into the driving seat again and will eventually overrun even the strongest of oil and mining companies.
Resource depletion is here, and there is no practical limit to how bad it can get.
As cheap and easy to mine / pump resources deplete and give way to ever more challenging (and thus ever more energy intensive and polluting) ones, we can easily end up with complex fossil fuel reserves requiring more energy to get into then what they provide in the end. Yes, that means that we will be forced to leave much of ‘our’ hydrocarbons underground — together with copper and many other metals for the very same reason. Not a hundred years from now. Some of it already today. And most of it within decades.
This is what I call walking up against a landslide. The sooner we, as societies, realize that we are fighting a battle we simply cannot win, the sooner we can start planning what to do with the remaining easy to access resources, instead of using them up in wars or throwing them on the waste dump. But in order to do that, first, we must get rid of stupid myths like ‘peak oil demand’, ‘renewables’, ‘the hydrogen economy’ and get down to working on a low tech, low energy future together with a transition towards a local and truly sustainable economy based on regenerative agriculture.
Until next time,
(1) A battery pack moving a truck a mere couple of hundred kilometers (as opposed to a thousand via diesel) weighs 3 metric tons, and takes hours to recharge even on a fast charger. Besides not having the infrastructure to serve this electric charge demand, this short range “problem” alone would slow down and limit international transport to a point where it ceases to be viable. No ‘expert’ thinks that this is a way forward beyond powering milk runs around the town or hauling containers from a harbor and into a nearby DC (distribution center). So don’t let yourself to be fooled by the existence of electric trucks or even mining dumpers here, these are mere subsidy dumpsters — used to extract government and investor money — not to provide a viable alternative to diesel machinery.