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| Sun Apr 27 17:06:56 2008 Yellowstone to Yukon |
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| Tue Apr 15 22:13:14 2008 Peak Oil |
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| Tue Apr 1 20:00:00 2008 Profits Questioned |
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| Sun Apr 27 17:06:56 2008 Yellowstone to Yukon The Y2Y 2007 Annual Report. |
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| I just received the 2007 Annual Report from the Yellowstone to Yukon Conservation Initiative, also known as Y2Y. If you aren't familiar with Y2Y, check out their site. Skip their vision statement since it is somewhat fuzzy and vague, although it does at least mention "habitat connectivity." Instead, take a look at their scientific rationale and read the story of Pluie, a grey wolf that was tagged so they could track her movements throughout the greater Y2Y area. Or see my old Y2Y blog entry. The basic idea is connectivity: the idea that existing parks and habitats should be well-connected so that megafauna can roam freely across their historic ranges. Although there are several large parks in Canada and the United States in this area, many animals (bears, wolves, fish, birds) need even larger habitats. Rather than block off a huge area into a megapark, which is unrealistic, the idea is to focus on good-sized parks with corridors that connect them for wildlife to move through. [Aside: check out the distincion between r- and K-selectivity. I hadn't seen that before!] So what happened in 2007? For one thing, they have widened their strategy somewhat. To help prioritize efforts, they have split their investigations into three areas focused on key animals:
Based on those three strategies, they identify the highest-priority areas to focus on. (Check out the map in that link!) I'm a bit worried that the strategy has broadened so much. There is a danger that trying to do everything results in doing nothing. But it looks like their change to three conservation strategies just boils down to using a more sophisticated method of picking high-priority areas, which is fine. They also list how they spent close to $500K in grants in 2007. Most of the money, $250K, went towards the purchase of an 87 acre parcel of private land in southeast BC, on behalf of the Nature Trust of British Columbia. Surprising that they had to spend so much for that! But this is exactly the sort of purchase that Y2Y is focused on. Hopefully we'll see more of these in the coming years. I think Y2Y represents one of the better approaches to saving large ecosystems in the Northwest! Definitely check it out and consider making a donation. I donate every year. Comments |
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| Tue Apr 15 22:13:14 2008 Peak Oil So when will the oil run out? |
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| In earlier posts (Apr 1 and Mar 26) I mentioned that oil prices would go up because demand would increase while supplies ran out. Reading some of the links, I started asking myself: "When will the oil really run out?" And then today, it was announced that Russian oil production declined in the first quarter of 2008. Maybe it's a trend? Some people think that the drop in Russian production is a short-term decline, but other articles claimed that the drop could be because the oil is running out. One Russian oil executive has claimed that "the period of intense oil production is over" and last year's Russian production was the most he would see "in his lifetime." Dire stuff! Could that happen across the world? For instance, will we see gas rationing in our lifetimes? Figuring out when the oil disappears depends on three things:
Worldwide Oil Consumption How much oil does the world use? It turns out there are decent statistics on that. For instance, there are many statistics about US oil consumption from the US Department of Energy. There are a lot of breakdowns of how much oil and petroleum products we produce and consume. We consume a lot more than we produce--no surprise. Of course, the oil market is global, so the US picture isn't enough. There is good information about world oil consumption from the CIA World Factbook. The summary? In 2005, the world consumed close to 30 billion barrels of oil. The US led the list with 7.5 billion barrels--that's over 20 million barrels a day. Determining the increase in consumption is difficult. The US has actually started flattening out. I think a few years of high oil prices are starting to affect consumer behavior. During the oil crisis of the 1970's, US oil consumption dropped by around 20%. So clearly we are able to cut consumption when needed! However, the rest of the world is consuming more. China's rate of increase is over 7% per year, and India's use is also growing at over 5% per year, according to The IAGS. So determining yearly growth is tricky. Based on historical data, I picked a yearly growth of around 1.5%. But that is probably on the low side. Worldwide Oil Reserves Okay, the world consumed 30 billion barrels in 2005, and we consume about 1.5% more each year. How long will the oil last? It turns out reserves are hard to determine. There is a lot of discussion about reserves, with several people noting that many countries suspiciously jacked up their stated reserves without any clear explanation. (See another example here.) I'm using a value of 1 trillion barrels of proven reserves, since that seems to be generally agreed upon as a minimum and is also the figure given by the Department of Energy. There may be more oil in the world, but it is generally believed that there are 1 trillion barrels of cheap oil. Other oil will be much more expensive to extract. Given consumption (30 billion barrels per year in 2005 with a 1.5% growth rate) and reserves (1 trillion barrels) it is simple math to calculate how many years remain. The result? The result is that we run out of oil in 2032 (24 years from now). A 3% growth rate in consumption would move that date closer to 2028. Twenty years. That's not long. But that's also not realistic. That assumes that consumption keeps growing, and production matches it. We'd keep pumping more and more oil out of the ground until everyone's wells ran dry on the same day. Worldwide Oil Production In practice, production starts declining as oil fields get depleted. According to Hubberts, any given oil field tends to have a rapid ramp up of production, hits its peak, and then rapidly declines. So the problem isn't that we run out of oil. The problem is that within a short time of hitting peak production, global production starts declining, and the world cannot possibly produce enough oil to meet its needs. And production will keep declining at a fast rate. If you add up all the oil production curves from all of the world's oil fields, you get a total worldwide oil production curve. The result is on the left for all but OPEC and Russia. As you can see, most predictions indicate that the rest of the world has already peaked (the US peaked in 1971). What can possibly save us? Originally OPEC and Russia were believed to have large production remaining, but Russia could be near their peak. So that leaves only OPEC, and no one is sure about their reserves or production capabilities. It seems doubtful that they could compensate for the world's increased demand and everyone else's production decline at the same time. Over the next decade, production should drop dramatically as oil fields are depleted, and we don't have large new oil fields to develop. The impact is hard to judge. Certainly we are hosed in 2032. The question is: will we hit hard oil shortages much earlier? Peak Oil This worst-case scenario, that we are only a decade or so away from worldwide oil shortages, is called Peak Oil. There are many believers in peak oil (such as this guy and these guys). Much of it has the ring of Y2K doomsayers! But even industry insiders like this guy think that we are close to significant oil production declines. Certainly there are people who disagree, such as this guy. But overall I am inclined to err on the side of caution. Based on all these sources, I think production will decline, and/or will become more expensive. The combination of less production, more expensive production, and increasing demand, will drive oil prices up through the roof. When will this happen? We may have a short breather, since US consumption is flattening a bit, and India and China haven't yet caught up. But I'm sure we'll see prices of over $10 a gallon (in 2008 dollars) for regular gasoline within 10 years as production declines kick in. And it will just get worse from there. Another prediction: we'll see gasoline rationing within 15 years. Start planning now! Comments |
Related: > environment < energy predictions Unrelated: books economics geopolitics lists mathematics science |
| Tue Apr 1 20:00:00 2008 Profits Questioned An accusatory focus on energy company profits hurts the Green cause. |
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| Today Congress went through the familiar ritual of questioning energy companies about their high profits (stories here and here for instance). If there was serious suspicion of collusion or other tactics to defraud customers of money, then a Congressional grilling is warranted, as well as legal charges! However, it is very clear what is happening: oil is a scarce commodity. The massive drop in the dollar's worth, our high energy consumption, and dwindling supply mean that gas is more expensive to produce and harder to come by. It's a triple-whammy: production costs go up along with demand, while supply goes down. Any economist will tell you that prices go up. And when prices and demand go up, so do profits. You aren't running the business correctly if that's not true. All of these companies are facing the usual questions of "do I cut prices to beat my competitors and steal more market share, or will I lose more money that way?" And the equations get harder if you have less control over supply (they can't lower prices and increase supply, since supply is restricted). Incidentally, there are some amazing resources for examining how much oil we use. Check out this site for graphs of per-capita energy consumption. Very small states with lots of oil have crazy consumption ratios. If you disregard them, the US and Canada are clearly far above standard industrialized countries in terms of consumption, running 25-50% higher or more than most of Europe! This page, while atrociously designed and in places slightly out-of-date (but only in places), has fascinating statistics on prices and proven reserves. Also see the author's statement (halfway down, titled "Personal note about bias"), he gives an interesting account of his own shift in thinking. And he links to this interview which is one of the scarier interviews I've read in a while. For examples of how much the dollar has declined, check out the value of the Euro over the past 5 years, which has climbed as the dollar has weakened. Or look at the value of the dollar vs. the Canadian dollar, which shows how the Canadian dollar is now worth more than the US dollar. Remember, exchange rates are fundamentally a measure of foreign confidence in our economy. Given our trade deficits, inability to control spending, and absurdly low interest rates, most of the world thinks we are a dubious investment. So, due to poor management of the economy (devaluing the dollar) and poor management of energy consumption (we keep consuming more oil), gasoline prices and therefore profits have gone up. What good does it do to grill the energy company execs? It is purely political staging. People are annoyed about high oil prices, and members of congress know it is easier to harangue the energy company CEOs than actually fix the real problems (limited supply and increasing consumption). This is too bad, because it deflects attention from the real problems and their fixes. The problem of high oil prices can be fixed! The solution is to consume less oil (duh). Oddly, Congress seems to not be talking about that. This page, from the Natural Resources Defense Council, is old but nonetheless has a straightforward solution. Bump up the required mileage! That is, force an increase in fuel efficiency. This worked well in the 70s, and can work again now. Curiously, the energy corporation CEO-bashing continues. Get used to it, because as oil supplies dwindle and our consumption increases, gas prices will continue to skyrocket. Hopefully a few members of Congress will decide to fix the problem rather than grandstand. Comments |
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