Price-Driven US Energy Independence

Poor People, Poor Business Models, and Poor Economic Models will bite the dust, first. Followed by slightly less poor people, slightly less bad business models, and slightly less bad economic models. Followed by Average people, and aver . . . . . . . . . .

CNG and propane powered vehicles are offered directly by a number of manufacturers in Germany. Volkswagen for example has a diesel, gas and CNG powered version of the Touran minivan. Testing by leading automotive magazine Auto, Motor & Sport showed that the CNG version is cheaper than the gas model when driven more than 7000 km/year and cheaper than the diesel from 10.000 km/year. Part of those savings come from the low taxation of CNG vs. gas and diesel in Germany, though. The car is powered by a 150 hp/220 nm 1.4 litre engine with a turbocharger AND compressor that costs 3850 Euros more than the gas powered version and has a range of 420 km.

politicians are a dime a dozen and easily replaceable. hardly unique.
blame the taxpaying obedient subjects – sine qua non. oh, they cry like a busted virgin afterward, but it is the taxpaying voting lot who ask for, beg for, plead for and pay for that shafting.
hence, it’s not imposed because it was negotiated. such a negotiation is a business transaction.
don’t bust the john – he was surrounded by hookers. disregard their whinging – it’s part of their act. they truly love the abuse – they pay well for it, too.

Speak roughly to your little boy
and beat him when he sneezes
he only does it to annoy
because he knows it teases.
I speak severely to my boy
I beat him when he sneezes
for he can thoroughly enjoy
the pepper when he pleases
nobody forces him to use condommints

Thanks for presenting this. Not something that some of us have not be saying for years. That’s another story. What is illustrates is the world is a highly complex interplay of many different and often competing emotion driven conditions. No model can account for them except in the short term. Sounds like climate to me. I wonder if all those modelers talk to each other? Probably way to much that’s why they think they know more and predict better then anyone else.

This is a government report. Is there a reason why it should be trusted? Where did they get the data? How reliable is it? All my experience shows that peak oil is a lie and this report by an alarmist Australian watermelon government isn’t going to change that.
Government is the enemy of freedom and truth. THis is especially true of the US government.

“At $2.99 per mcf for natural gas and $102 per barrel for oil, natural gas is currently 18% of the price of oil in energy content terms.”
If CNG is 18% the cost of awl, I’m ‘on’a git myself a Ford F-150 an convert ‘at bad boy, tell you whut…mat even go into the bidness hyar in Texas…

@ Kum Dollison says:
Sure your 7 year old knows there is no such thing as a bottomless milkshake, because there is no soda jerk standing there continuously refilling his glass.
Why is there this assumption that the “making” of oil mysteriously stopped several million years ago? Reason tells us it never did and never will as long as dead things continue to fall upon the earth. Can we use it up faster than it forms? I can’t answer that question but, I seriously doubt it considering the advances in combustion we can expect. Further, I expect a swing to a hydrogen based economy long before any phantom “peak oil” state is reached. Nevertheless, there will always be copious sources of underground fossil fuel. You can take that to the bank!

“I think we are on the cusp of some really fanastic game changing events for the betterment of man kind”
I remain pessimistic about whether our “leaders” really care about mankind, never mind its “betterment”.
If you take a step back and look at things now you will see that betterment is not on the “to-do” list.
Reducing mankind to wattle-and-daub huts is more likely.

David-
Thanks for an interesting post. I have a question about Figure 2. Was the GDP adjusted for inflation? In other words was the GDP in 1980 or some other year dollars? Since prices as reflected by the CPI, roughly doubled between 1980 and 2000, it would make some difference in the slope of the curve.
Really interesting conclusion that we could be “energy independent” by 2020.

Kum Dollison says:
January 4, 2012 at 10:11 am
Production follows demand. Over the period of 2005 – 2011, the world’s economies have been in pretty bad shape.
If the only thing you look at is production numbers, you will never get the right answer.
Here in the US we’ve also been afflicted with an ideologue who has been making it harder and harder to increase production.

I have a feeling that “peak oil” and fusion power are related. Both are currently projected to happen in the near future, just as they have been for decades.

Production follows “Price.”
TheGlobal “Price” of oil has doubled since 2005 (apprx. $55.00/bbl for Brent to $110.00,) but Global Production was slightly less in 2011 than it was then.
And, from an American/Euro Centric point of view, it’s worth noting that an oil price that puts Europe into recession, and significantly slows the U.S. economy, China, India, and several of the other “emerging” economies chug right along. (in fact, the oil “Exporters” such as Saudi Arabia Boom – thus using even more oil.)
This subject evokes a visceral response in a lot of people, because, quite simply, it scares the loving beejeepers out of them. It wouldn’t if they studied it a bit. We Have mitigations, but we need to get busy on them. This is a case where ignorance, most assuredly, will not lead to bliss.

I believe two large oil fields were recently discovered off of Brazil, one off of the Falklands Islands, and the field where Deepwater Horizon blew out (and is currently off limits to drilling) is supposedly huge as well.
One of the problems with the Deepwater Horizon rig was that the volume of oil and gas and the pressure of it was just amazing.

When did WUWT become infested with Paul Ehrlich disciples? When we learn how to create and destroy energy and matter, then we can talk about peak this and that. Until then, we’re just moving stuff around.
But, concerning our present day capabilities. A show of hands for all the people that believe we’re extracting as much oil out of the earth as we can. Delusional. The BP spill occurred because we’ve limited the amount we’re going to allow to be extracted. The Keystone pipeline is being discussed because we’ve limited the places we wish to operate in. These things aren’t occurring because the earth has run out, they are occurring because of the choices our politicians are making.
Another show of hands from people who believe our energy sources will remain static over the next century. More delusion. We have more options today than we did just a few years ago. A few years from now we’ll have even more. If and when one source becomes less economical, we’ll change.
Another show of hands from people who believe our means of extracting fuels will remain static in the next several decades. More delusion. It isn’t that we can’t keep up with demand, it is because we choose not to. The discovery of more oil, gas, coal, the ability to extract other gases and liquids continue on a pace nearly equal to Moore’s law.
Finally, all of this worrying and gnashing of the teeth because we may run out of this or that. So what? We haven’t even come close to utilizing the potential energy around us. Indeed, even in the air that we breathe or the water which we drink, we have an abundance. We can do more with hydrogen than just make bombs, and we can do more with helium than just make balloons float. And while we’re at it, we haven’t even scratched the surface of nuclear energy utilization. There are, of course, many, many, more examples of untapped fuels and energy.
Ever wonder why, even after the billions and billion, if not trillions, being sunk into alternative fuels and energy they haven’t taken off? Because we don’t need them to and it causes more difficulties than it solves. If and when these situations change, then, too will the earth’s population change their utilization of fuels and energy. The whole point of my message is, don’t worry about what we’re using. Necessity and the path of least resistance wins the day. Always. There’s not a damn thing we can do about it and if we all gave it some thought, there’s not a damn thing we should do about it. What we should do, is go about the business of concerning ourselves with the condition of our fellow man.

David-
On rereading your post, I see a conclusion that the demand for CNG vehicles will increase.
IMO CNG is not an good alternate fuel for vehicles. Natural gas is ideal for commercial and residential space heating, water heating, and cooking. That demand will increase. I not sure about CNG for vehicles being anymore than a niche market .
Back in the 1980’s when alternate fuel research was beginning to receive a lot of attention, I worked for an organization that was testing CNG vehicles for the government. One of the things I looked at was how much domestic natural gas was available. It was clear to me that there was not enough doestic natural gas to supply a significant part of the vehicle fleet. Currently, reading about the newly recoverable natural gas finds, I thought that maybe there was enough natural gas. Your Figure 5 convinced me otherwise.
The other problems with CNG are all engineering problems. It is more difficult to meter a gaseous fuel into an engine than a liquid fuel. This negatively affects both fuel economy and emissions. Then there is the “C” part of CNG. Natural gas must be compressed. If I remember correctly the CNG tank pressure is 3000 psi. During the mid-eighties there was at least one pretty severe explosion in a bus barn involving a leaking CNG tank on an experimental bus.

I understand that oil can be described as “light” to “heavy” and “sweet” to “sour”.
How does “unconventional” oil differ from “conventional” oil?

While I understand the analysis, I am always leary of graphs like 13.9 which have the critical inflection at “Today”. This means the entirety of the prediction is future with no track record other than the conformity to date. As they say in finance, so in computer modeling, “Past performance is not predictor of future gains [or losses].

Hoser said at January 4, 2012 at 11:13 am “the answer is simple: nuclear”
How true. See this paper from Los Alamos in 2007 http://www.lanl.gov/news/newsbulletin/pdf/Green_Freedom_Overview.pdf is just a sample of what is feasible. In it they state:
“We performed economic analyses on a partially optimized baseline concept based on a single Gen III PWR to provide power for the process. The analyses estimated a capital cost of $5.0 billion for an 18,400-bbl/day synthetic-gasoline plant and $4.6 billion for a 5,000 tonne/day methanol plant. Nuclear power accounts for more than 50% of the total plant capital investment. The estimated operating cost is $1.40/gal for synthetic gasoline and $0.65 for methanol. Because the capital investment is high, a profit margin of $0.50 per $1.00 of sales or more is needed to yield an acceptable return on investment.
Therefore, the price of gasoline at the pump must be about $4.60/gal, and price of methanol at the plant gate must be $1.65/gal for these base cases”
As Hoser implies. who really cares about what’s in the ground. We’ve had the technologyto manufacture as much completely pure hydrocarbons as we need – virtually forever.
The issue should be how best to build manufacturing capacity which will give us cheap energy. Even nearly zero-cost energy. Worrying about peaks and fretting over things like oil is just a non-productive exercise.

http://www.csun.edu/~vcgeo005/Energy.html As long as we keep looking, we will keep finding. The only question is how much we decide to lock up (eg: ANWAR) and how much we find that is too expensive to pull from the Earth. Other than that, oil and natural gas will continue to be available to us. The only real question is how expensive Government can make it compared to how inexpensive technology can recover it.

I am an advocate of inexpensive safe energy in any form.
The cheapest and safest utility energy is hydro electric followed by hydrocarbon combustion. Go Hydro!!! Until all the useful water-potential-energy sites have been used up, keep building dams and transmission lines. Where hydro is impractical (cars and buses and locomotives and ships and some geographical locations) coal-oil–gas is the way to go!!!
I have a real preference for nuclear power for utility based energy.
This would provide safe cheap and strategically preferred energy to north America. We have lots of uranium 235… Canada is the largest producer of the worlds uranium at 22%.
Lest improve our energy independence and build nuke plants to power our cities. That way we can limit our need of middle east oil and financially starve the idiots in IRAN and Saudi Arabia and Venezuela, and Nigeria back to the stone age. France did it.
Canada is an enormous pantry of safe clean energy waiting to be used.

ha!! patriotic duo… so true…
Planes… that is what kerosene was made for!!!

In 2011 gas and other fuels were top U.S. export
http://www.sltrib.com/sltrib/money/53206814-79/billion-fuel-gasoline-america.html.csp

A report that talks about oil reserves, but omits unconventional oil (oil sands) is nothing more than a bad joke. It’s equivalent to producing a report on world population, but omitting the populations of China and India. Conventional oil reserves in North America are 25 billion barrels (mostly in the U.S.A.). The Alberta oil sands alone have reserves of at least 175 billion barrels (the minimum figure accepted by everyone), and as much as 2 trillion barrels (the figure quoted by the CEO of Shell Canada).

What we could do…“The Energy Information Administration (EIA) projects that daily petroleum production will rise 18 percent between 2010 and 2035 and that daily production from offshore wells (in the lower 48 states) will rise by over 40 percent.4 EIA also predicts that offshore drilling will supply significant increases in natural gas production. While total natural gas production will rise 16 percent over the same period, offshore production of natural gas will rise 63 percent, at which time it will be nearly a fifth of total domestic production. The reserves of petroleum are projected to rise by 5 billion barrels—even after extracting 57 billion barrels over the period 2010–2035. This happens because improvements in technology and price increases make previously uneconomic deposits economically viable. In short, petroleum can be a major energy source for many decades. Consequently an offshore drilling ban’s impact on the U.S. would be felt for decades. For example, between now and 2035 an offshore drilling ban would:
• Reduce GDP by $5.5 trillion,
• Raise the average consumption expenditures
for a family of four by $2,381 per year (and
exceeding $4,000 in 2035),
• Reduce job growth by more than 1 million jobs
by 2015 and more than 1.5 million jobs by 2030,
and
• Increase the total expenditures for imported oil
by nearly $737 billion.
These facts do not include additional development such as Anwar., or shale oil deposits.

This is World Oil ( C+C) Production for the last 10 years, according to “Joint Oil Data Initiative” (JODI.)
http://s574.photobucket.com/albums/ss189/Darwinian1/?action=view&current=JODICC.jpg
In fairness, EIA shows the last 7 years as flatter; but, in cases, like Texas, where there was a super-accurate 3rd party keeping tabs (The Texas Railroad Commission – TRC is considered by many to be the most efficient, accurate, hands-on, regulatory agency in the world,) they agreed with JODI, and not with EIA.
In any case, global production has been, at best, flat, and with the emerging economies like China, and the Oil Producers like Saudi Arabia, continuing to Consume more, and more, all the time, the trendline for Oil Prices is Not flat, or Downward, from here.

Given the artificial curtailing of oil exploration and production in the U.S. and the Gulf by the current administration, and given the current doldrums the U.S. economy is in, how can anyone talk about peak oil, U.S. oil consumption or production?

The maximum average annual price of oil (inflation adjusted) occurred in 1980. The peak daily price, also adjusted for inflation, occurred in 2008. Are we at or near peak oil? I have no idea but I’m not worried. What I do know is what Dr Milton Friedman said:
“Inflation is always and everywhere a monetary phenomenon.”

There are few problems with these sorts of predictions. One is that no one can predict the future with any reliability. Another is that past performance is a predictor of future performance. A lot of people have lost a lot of money with that sort of thinking. A third is that human behavior is often assumed to be unchanging. Humans change and adapt to meet current conditions. Almost any future scenario for oil is possible.
If enough people make a prediction, a few are bound to be right, but those few are likely to be wrong the next time.

The video I posted was not complete, sorry for that.
Here is the original presentation.
Matt Ridley ‘s presentation starts at 20.28

Your figure 2 is not clear on whether the US energy intensity is based on US production or US consumption (more likely). However, neither option would give a true picture.
Especially since the 70s, the US has been running huge trade deficits. Yes, a significant part of that trade imbalance is for energy imports, but not all. To the extent that the trade imbalance is due to the foreign manufacture of goods consumed in the US, the energy used in the production of those goods would need to be included in the energy intensity figure.
Including this vicariously (?) imported energy would show a very different graph from figure 2. It is only through the kindness of stangers that we are able to pay for the goods (including the energy spent to produce them) while exporting rapidly depreciating paper.
Once those kind strangers wake up, the US will not “happily” be energy independent.

Hmmm – and the SHORTAGE 😉 of natural gas has caused the price to go from $8 to $3 and unlikely to break $4 per million BTU any time soon /sarc off – Here are some of the reasons:
http://www.forbes.com/sites/kitconews/2012/01/04/2012-outlook-crude-oil-prices-could-rise-this-year-but-prices-could-be-very-volatile-2/
I have an oil well on my farm that has been producing since 1952, and they are still drilling more and more around me as technology changes. Yes, oil and gas will run out one day, but I do not fret for my grandchildren or theirs.

1979-1981 what happened then? Inflation of the worst kind, leading to job loss and less demand for oil. And after that the use of oil increased again. In 2008-2012 there’s been a sweeping world recession that has limited consumption. Do you think the future will follow the 1979-1981 and demand will increase as the economy recovers? Everything from 2012 forward is just models and guesstimates. It’s the same old every year. Peak Oil, peak CO2, we’re doomed, doomed I say!
BTW it was +17c in Calgary today, should I worry about AGW?

bionuclearguy says:
January 4, 2012 at 8:42 pm
Thanks very much for the link to Michael C. Lynch’s most excellent paper, which demolishes most of the alarmist”s hand-waving about declining Saudi production:

Again, this is part of the “what if” argument, where one has to ask why there is no plan B to deal with a meteor striking the Saudi oil fields.
This shows yet another example of poor research and numbers taken out of context. The threat being discussed is of depletion that would cause a production loss on the order of 500,000 b/d per year, at the outside, which sounds large unless you realize global capacity additions are about 5 mbd to 6 mbd, most of which goes to offset depletion. In short, even in the most dire scenario—for which there is no evidence—the impact would be only marginally noticeable.
Evaluation:
Ultimately, then, all the evidence purporting to show a near-term peak in Saudi oil production is discredited. It falls into patterns of irrelevant observations that are purported to be significant,assumptions of causality without considering alternative explanations,misrepresentation of data, numbers taken out of context, and so forth.

CROP CIRCLES IN THE DESERT: THE STRANGE CONTROVERSY OVER SAUDI OIL PRODUCTION kept me up waay past my bedtime, but it is well worth reading in its entirety. Peak Oil falls into the same category as CAGW: BS meant to baffle and frighten the masses.

You need to update Fig 4 and add “Eagle Ford Shale Production”. It is coming on strong.
Also, evidently they are getting oil from shale in Eastern Ohio, but I don’t work up there, and don’t know the particulars. You have to throw some shale oil from the Rockies also.

At the person who asked about light / heavy sweet / sour:
Sweet / sour has to do with sulpher in the oil and acidity. Taking sulpher out takes time, money, equipment, so sour sells cheaper than sweet. Heavy oil is sort of like a mix of motor oil and grease. It can be various ‘thicknesses’. It takes time, money, and equipment to turn that into thin light liquids like gasoline and kerosene (catalytic cracking or ‘cat cracking’ and reforming). So heavy sells for cheaper than light.
Most “unconventional” is very very heavy, and often soaked into something like sand or shale so it will not just pump out but must be heated, cooked, steamed, or retorted to get it out (in some processes it is chemically converted in the ground into liquids). This can consume various mixes of water, natural gas (heat) and chemicals. So costs more. (Tar Sands run about $25-$35 /bbl for the effort, shale oil about $50). So folks don’t put $Billions into getting that oil out if they think Saudi can just push the price down to $30 and put them out of business or PertroBras in Brazil can find another monster field – they are at what, 2 or 3 now in the last dozen years?…)
This all matters.
For a bunch of years Saudi produced from a couple of giant fields. Why even look for more if you have 2 Million bbl/day of reserves you are not selling? They even had a third field somewhat drilled out, but folks didn’t want to buy that oil. It was “heavy sour”. So a few years back we heard two statements that sounded conflicted, but were not. We were told “there is a shortage” and from the Saudis “There is plenty of oil, folks are not buying”. Why? Because the refiners didn’t want to spend money converting to process ‘heavy sour’ if they could just buy ‘light sweet’.
Over time (partly due to a lot of other ‘heavy sour’ from south of the USA) refiners converted. Valero VLO was among the first (so for several years bought heavy sour cheaper than other refiners bought light / sweet and made a bundle… a great trade for about a decade); but other refiners converted too.
Now a lot more refineries can process heavy sour.
And about 2 or 3 years ago a bunch of drill rigs headed off to Saudi to start drilling more holes in some of the other areas. They added a couple Million bbl/day, last I heard, but are still at it.
How much ‘reserves’ does Saudi have? Nobody knows as until recently they didn’t even need to look for more and couldn’t sell all they had drilled. So yeah, the ‘light sweet’ fields are getting watery and harder to produce. Open the taps on the heavy / sour fields and send that to the upgraded refiners… Oh, and maybe actually try looking in a couple of other areas to see if there is more laying about…
At the same time something ‘strange’ happened in deep water. Chevron CVX found oil below the depth where it was said to be impossible to find oil. Under the Gulf of Mexico. LOTS of oil.
Just impossible, everyone said. Heat would break it down and it just can’t exist. But it does.
So now all over the planet, in EVERY FIELD EVER PRODUCED, we have to ask: Is there MORE, below where we stopped drilling because “it couldn’t exist”? There is a whole new shell of depth to explore…
Brazil ran out to deep water and found a couple of giant fields. Petrobras PRR sold 20 years worth of production to China in exchange for $200 B or so of US Treasuries China wanted to dump. Estimates are all over the place but some put it at about a Saudi Arabia (others much less). Nobody will know until it is drilled.
BTW, in old dead “empty” oil fields, about 1/2 the total oil is still in the ground. They are shut in as it is too much trouble to try and produce at that point (as long as new fields can be found). But the oil is still there. So for ALL the oil ever produced (shown on those graphs) there is at least that much oil still in the ground. Waiting for a Bright Idea to get it out. APA Apache Oil makes a great living producing oil from spent fields with new techniques…
Mean time Russia started looking “where oil can’t exist” in hard rocks and found oil. The “abiotic oil” that some folks say can’t exist. So Russia is producing like crazy. We now have huge chunks of land that was never looked at because it was the wrong kinds of rocks; that have to be looked at because Russia finds oil there.
See a pattern here? When oil is cheap, we stop looking. When there are more than 50 years reserves, we stop looking. Then price gets up to $100 /bbl and we look, and find more.
Oh, and in the other oil thread I posted a comment that Devon Energy DVN just signed a deal with China for $2 Billion to start producing shale oil in the USA. Oil that “doesn’t exist” in terms of “reserves” because we don’t produce it. Yeah, a chicken and egg definition problem. (That’s WHY we are always going to run out in 50 years, btw. We stop defining things as reserves at that point…) So there are now about 3 TRILLION bbls of “shale oil” that just became “reserves” (or will, as soon as someone makes the entry in an annual report).
BTW, global tar sands are estimated at about the same. Some folks think there might be about a Trillion bbl in Venezuela alone. Again, folks don’t really know as we don’t need them yet.
The kind of oil in really crummy deposits is asphaltine heavy. It has a lot of polycyclic hydrocarbons in it. (Large sheets of joined benzene rings) and not much linear molecules. So it takes a lot of cat cracking, so why bother. For now…
There’s more (a whole lot more) but this is already a bit long. Just as a wrap up, though, there are LOTS of sources we don’t talk about much. Like using nuclear power to turn coal into gasoline. VW did a study on this in the ’70s and it was competitive at about $2 /gallon. Call it $4/gallon in present dollars.
For all the folks fretting about converting cars to run on natural gas: Don’t forget you can just convert the natural gas to gasoline in a GTL plant. Not really hard to do at all. Chevron has one or two running IIRC. We’ll be up to our eyeballs in nat gas for generations…
But if all that isn’t enough, Rentech RTK has just done a spin out / secondary of it’s nitrogen fertilizer facilities and is also making ‘biofuel’ for LAX airport. From trash. They also make oil from trash. I don’t think we’re going to run out of trash any time soon. (but if we do we can go mine all those old landfills 😉
BTW they just signed a deal with Peabody BTU one of the largest, if not THE largest, coal miners in the world. To make oil from coal:

NEW YORK (MarketWatch) — Peabody Energy on Tuesday pledged $10 million in cash toward a future coal-to-liquid fuel operation run by Rentech Inc., in return for the right to buy a stake in the plant, which is being billed as the first commercial U.S. facility of its kind.

http://www.marketwatch.com/story/peabody-energy-to-invest-in-rentech-fuel-plant
Yeah, it’s a small one now. And there are other folks with slightly different technology doing very similar coal to oil things (several facilities being built in China, IIRC by Synthesis Oil SYMX and Syntroleum SYNM, but it could be others. SYNM has a deal with Tyson TSN where they turn chicken butchering waste into oil…
So yes, absolutely. We are in PEAK (conventional) OIL! We are GOING TO RUN OUT!!!!
And nobody will even notice.
CTL, GTL, Trash to Oil, Tar Sands, Shale Oil, methane clathrates, et al will be filling our tanks instead. Price about $4 / gallon. (Which is why folks have started making those facilities now).
That is the ‘magic thinking’ that everyone forgets. And it really IS Magical. It is “resource substitution” via “technology”. It has been the history of modern man since we turned our first napped rock into a substitute for claws and teeth via the stone knife.
So take all those pretty graphs and profound projections and learned concern, and just chuck ’em in the trash bin. Just not important as long as we have the technology we have that is already invented and sitting on the shelf. Some of it has been in production for 30 years. (SSL Sasol making gasoline, Diesel and “petro” chemicals from coal since the ’70s). Just need oil prices to hold above $80 /bbl average with only sporadic drops to $50.

@MarkW
I find it funny that someone named “kaboom” is pushing CNG.
++++++++++
It is called nominative determinism. You become what you are named.

The entire article fails to address (or at leas mention) the taxes that would be levied on CNG fuel or modifications to fund the roads, and other political dreams.
These would be wholesale level, distribution level, and retail level. This can alter the math, depending on the funding that comes from the lobbyists.

I paid $1.65 per gallon of gasoline in 1980 when, for example, the spot price for Brent was $36.83 per barrel. In late 1999, I paid $0.99 per gallon when the spot price for a barrel of Brent crude was $17.97. Recently I paid $2.34 for a gallon of gasoline. Who is going to tell me what I will pay even next year with any confidence?
And to add to the uncertainty, how many groups who are not end users are affecting the prices of crude and gasoline based on current events?
And Pennsylvania is a major producer in the energy industry now. Who predicted that?

ferd berple says:
January 5, 2012 at 12:30 am
“The US could cut oil consumption even more if all 300 million lived in a country half the size of Texas.”
—
(original comment by) James Sexton
January 4, 2012 at 11:27 am
”If the US went to German vehicle efficiency, they would halve their oil consumption.”
—
We can’t change the size, or geographical expanse, of the United States, but we could save quite a bit of fuel if we changed the way we haul freight. Trains are much more efficient than trucks for this purpose:

As illustrated in Exhibit 1-1, rail fuel efficiency varies from 156 to 512 ton-miles per gallon, truck fuel efficiency ranges from 68 to 133 ton-miles per gallon, and rail-truck fuel efficiency ratios range from 1.9 to 5.5.

http://www.fra.dot.gov/Downloads/Comparative_Evaluation_Rail_Truck_Fuel_Efficiency.pdf
~
And ‘sorry to belabor the point, but everyone talking about Peak Oil really needs to read, and understand, David C. Lynch’s brilliant analysis of this misleading notion.
Please read PDF linked by bionuclearguy on January 4, 2012 at 8:42 pm

This is a really bad time for “magical thinking.”
I agree. I also agree that there are untapped reserves in moderate abundance that aren’t being exploited for political/environmental purposes, most likely (cynic that I am) to preserve them so that in 20-30 years we have oil as the oil supply of the rest of the world is being sucked dry.
As for “abiotic oil” — perhaps, possibly, but far from proven, don’t you think? Consider where, and how, most oil is found, ditto coal. And even if oil is partially or even completely abiotic in origin and leftover from when the planet was first cooling, well, we still have to be able to get it and most wells do run dry eventually and the replenishment rate “from below” may not be great enough to keep up with demand.
This is actually a rather excellent and informative report, and is the kind of thing that should be out there driving the entire public discussion on energy. The real point of these figures is that — if true — there is no CAGW problem at all! due to CO_2, simply because within the next decade, we’re all going to be producing a lot less CO_2 no matter what.
The bad thing about the report is that it focusses too strongly on “just oil” (and natural gas, because the two are often found together). A better report would consider oil, NG, coal, nuclear, solar, and wind. The reason all of them need to be considered together is because there are easily understood crossover points as supply shrinks and demand continues relatively unabated, causing the price to fairly systematically increase. At some point it becomes cheaper to mine coal and turn coal into gasoline than to mine oil. Oh, wait — that point is now. The first US coal-to-gas production facility is just now breaking ground in West Virginia (Adams Fork Energy).
As I have often pointed out on this site, which seems to contain some “haters” of solar energy, hate it or love it solar energy is already at the leading edge of the crossover point where it is more or less break even as a way of getting energy to dump into the electrical grid (and thus reduce the cost to utilities relative to more expensive fuel-based electricity). There are decades of growth in this process where storage doesn’t matter and the fact that the sun doesn’t shine at night doesn’t matter — daytime, unstored electricity will simply be cheaper than fuel-produced electricity, which will increasingly be used just to manage and smooth production and demand variation. And then there are a lot of people working on solar plants that can “bank” heat and provide smoothed output and nighttime output. Not all of the pilot generating facilities being constructed are profitable yet, but as the technology is worked out the construction and operation gets cheaper, and the projected continuous rise in the cost of oil and coal makes crossover to solar, driven by pure capitalist profit advantage, nearly inevitable.
At the moment, solar-cell derived electric has an amortized payback time of roughly 20 years in North Carolina (less in the southwest where insolation is highest, taxes on alternative forms of energy are the greatest). That’s just a bit too long for most people to want to pop for the substantial investment involved, even with interest rates as low as they are. But the cost of solar cells has an exponential halving time of roughly 10 years, and the rising cost of fuel based energy is pushing in the other direction, reducing its comparative cost even faster. As this process continues, solar implemented on both large and small scales will become increasingly attractive until it is a no brainer, costing half as much as fuel-derived energy.
Biofuels are also a form of “solar” energy, and it is not terribly unlikely that we will see research-driven breakthroughs here that permit e.g. solar plants to produce carbohydrate-rich algae, ferment it, convert it, and produce gasoline that way as well (or produce bio-diesel from high fat strains). It isn’t all about corn or deforestation — there are really exotic technologies out there that people are investing in and any one of them could turn out to be an “oil killer”, yet another alternative way of getting gasoline without mining oil (alternative to coal-to-gas, already possible at or around break even). It’s just a matter of coming up with a natural bio process that creates organic, fixed carbon at a cost per derived joule that competes with the cost of mining those derived joules out of the ground either in the form of coal or oil. This completely solves the problem of storing the sun’s energy for later use, and has the considerable advantage of letting us continue to drive gasoline-fuelled cars. Gasoline simply has an enormous energy density compared to nearly any alternative. Note that biofuel is a “carbon neutral” solution. It just re-fixes atmospheric CO_2 to be burned again, and it might give all of our NC tobacco farmers something to grow that doesn’t kill people but will still be worth a fair bit of money…;-)
Even wind isn’t to be sneezed at as energy prices rise. Cost-benefit analysis doesn’t give a damn about global warming scares — what matters is that a free society is going to harvest energy the cheapest way they know how, and if it turns out to be wind, well hell then, let’s make electricity from the wind! In the meantime (before we reach the break even to win a bit point) let’s ensure that we work on the technology itself so it is there, as cheap and debugged as possible, as an alternative for when we might need it.
IMO, the energy production profile we are likely to have in the year 2050 will have well over half of the world’s (not just the US’s) energy production derived directly or indirectly from the sun, unless we work out fusion first, with nuclear, NG, and coal making up the differences. I won’t be alive at that point to see it (probably) but I expect to see massive solar plants being built for most of the rest of this decade, initially partly subsidized but as time passes we’ll see more and more of them being just plain built straight up as the cheapest way to get more, cheaper, electricity. Large parts of the world are ideal for making solar energy, and a second technological problem that could revolutionize its production in those places is the development of cheap ways to transport the energy to places where the sun does not shine so much, so often, so consistently. A comparatively tiny patch of the Earth’s surface in Arizona or the Sahara somewhere could produce all of the energy used by the entire world, if one could get it from there to here, if one could use it as easily at night as during the day. Hybrid technologies — using solar electricity as the energy source for converting e.g. plant matter to biofuels that can later be burned in conventional plants — or improved transmission lines might do the trick here.
This is why I consider CAGW to be such an enormous non-problem. We know that in the year 2050, let alone 2100, we aren’t still going to be burning fossil fuel for energy the way we are today. It wouldn’t matter if somebody discovers that there’s a bubble of oil with the volume of lake superior just a few hundred meters further down than has ever been explored right under my house right now — there are too many problems associated with mining and burning fuels for energy and in any case burning fuel for energy doesn’t scale and continue into the next millennium — we will have to come up with alternatives to achieve a steady state civilization that doesn’t risk collapse back to barbarism or conversion into a “water monopoly” Imperium, substitute energy resources for water. We can even clearly identify the eventual replacements for oil (and yes, for coal as well). In the end, conversion will be driven not by ideology or politics but by humans, acting in their own self-interest. It will simply be cheaper not to use oil for fuel, because non-oil derived energy will cost less and be increasingly abundant because, well, it costs less, which will make it even cheaper. Very little in the curves above suggest that oil is ever going to get to be much cheaper than it is right now — 30% variations up or down sure, but we’re not likely to see gasoline prices of $1/gallon for oil derived gasoline in any future Universe I can foresee.
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Robert Brown – good comments covering many of my own thoughts. Interesting that you also noted some oil reservoir areas seem to being reserved. Good well thought out comments. Thank you.

@_Jim says:
January 4, 2012 at 7:03 pm
R. de Haan says:
January 4, 2012 at 6:27 pm
Nice ‘egg head’ recitation of the advantages of CH4 vs coal, et al, but, there is the matter of convenient transport CNG for passenger vehicle use, the retrofitting of existing vehicles et al.
He doesn’t explain the economics of that process.
Say, Ron, do you ever use the trunk in your present vehicle, for say, grocery transport? Kiss that function goodbye in the case of fueling via CNG …”
Jim, thanks for the question and the remarks.
1. I see shale as an excellent fuel for electricity generation.
You don’t need and extensive costly grid, no smart meters as you can simply scale up or down the power plant. Same for natural gas. I always say that natural gas is good for cooking, not for driving.
2. Coal, natural gas, shale gas can be converted into gasoline and sulfa free diesel
Coal to liquid is already in use in South Africa and China.
Gas to liquid is already in use in Qatar (Shell Plant)
3. As said I see nothing in the application of shale or natural gas for automotive applications.
It takes too long to fuel up and you lack range. You need a high pressure system, it costs additional energy and the pumps/valves have short life cycle
In the Netherlands we have busses running on natural gas that are fueled up during the night.
But a test with taxi’s went bad because the time to fuel up was too much.
A taxi makes money when it’s moving not at the fuel pump.
4. I love LPG though.
It’s low pressure, high octane and if you use liquid injection this is absolutely superior to gasoline.
The tank is no problem because you simply build it under the floor without loss of boot space.
And fueled up with gasoline and LPG you can double your range.
Besides that. The engine runs smoother and the engine oil remains cleaner, less wear, less maintenance, just great and where I live very, very cheap.
Last year I bought a P92 Range Rover (8 cylinder) on the cheap with low milage and put an LPG installation in it just to have a 4WD for winter conditions and some heavy pulling.
At home I’ve build a power generator (for emergencies) in the basement based on a Smart 3 cylinder engine I bought for scraps and this engine also runs on LPG.
The exhaust gas is diverted to the greenhouse (tomatoes, cucumbers and peppers love Co2) and in the garden I have two big storage tanks. One of them has an electric pump so I can fuel up the cars at home.
I think I can bridge a 6 month oil boycott with full tanks.
And if that doesn’t work I simply move to another location.
We don’t have an energy problem, we don’t have a climate problem and CO2 is great stuff not a poison.
By the way, the company that delivers the best LPG injection system available with fuel tanks that fit under most cars is Vialle, just google it.

How many would contend that there exist more oil on this “feeble and weak” little planet than there is water in the Great Lakes in US and Canada?
Imagine our 160 years use of oil. That’s a lot of oil!
Take a world map and look at the Great Lakes. They’re some big lakes right, at least on the surface, but still just specks on the chart compared to everything else. Banded together, though, they’re like the size of Ireland.
Imagine the thousands of oil drilling sites. Put the reserves together, do they rival the great lakes in size in your imagination?
They should, because spread all that oil out, the area would be H U G E !
But of course it would be so deep. Apparently there’s more an 14 times more water in the Great Lakes than the oil we have used for 160 years, and the Great Lakes aren’t all that deep.
No matter the hubris or ego, but it’ll probably take more ‘an a couple of hundred years to extract a billion years of natural oil production. After all, when all is said and done, our planet is only small compared to the sun, otherwise it is friggin ginormous compared to man(n).

Robert Brown says:
January 5, 2012 at 8:30 am
…
As I have often pointed out on this site, which seems to contain some “haters” of solar energy, hate it or love it solar energy is already at the leading edge of the crossover point where it is more or less break even as a way of getting energy to dump into the electrical grid (and thus reduce the cost to utilities relative to more expensive fuel-based electricity).

You’re usually so clear-thinking, too bad you resort to handwaving instead on this subject.
The magical transmission and storage capacity required to make variable sources from hugely diffuse energy collectors work don’t and can’t exist. TANSTAAFL. Even room-temp superconductive transmission wouldn’t change that (and would deflect energy sourcing and consumption into totally different paths, first, in any case.) Case in point: Britain has very poor solar resources, but a fair amount of wind. It would require windfarms covering 10-20% of its land mass to provide its power, assuming they could be maintained and replaced as they fail and reach end-of-life (much sooner than projections, of course, as usual). And sometimes (2009, e.g.) a blocking high sits on the country in the middle of winter, and the winds die. And people soon follow.
As for solar:
Solar park after 18 months:
[IMG]http://solarresearch.org/sk2010/images/stories/Loeschke_PVSolar_Markranstaedt_201106.jpg[/IMG]
Solar park after 20 years:
http://notrickszone.com/wp-content/uploads/2011/07/1989-Solar-Park.gif
http://notrickszone.com/2011/07/04/weed-covered-solar-park-20-acres-11-million-only-one-and-half-years-old/
Take your pick!
Costing for panels is the least significant part of the calculation. Even if they were free, solar would still be egregiously unworkable on a large scale.