U.S. Deparment of Energy Peak Oil Report Sits on Shelf Gathering Dust

During the past few months two Peak Oil studies/mentions have garnered some attention, mainly due to the sources.  One was a U.S. Department of Defense Joint Forces Command report warning about Peak Oil and the other was the U.K. Industry Task Force on Peak Oil and Energy Security, both discussed in previous Sticky Feet blog posts, including this open letter and the post National Governments Remain Silent on Peak Oil.  These reports expressed significant concern that global oil production has peaked and that we will experience acute supply shortages in the years to come that will have economy-wide and national security implications on a large scale. From my perspective, all this means that the credit contraction and crisis is on temporary hiatus only until oil prices increase once again to levels that will begin another cascade of global financial distress.

As reported here and elsewhere, the U.S. Department of Energy, which is responsible for this stuff more so than DoD, remains in official Peak Oil denial; however, I recently found a Peak Oil report sponsored by the DoE that essentially confirms that we are in for a world of pain unless we mobilize mitigating action in sufficient time.  The report has spent years gathering dust on some DoE shelf (although it has been circulating among Peak Oil proponents), but it is telling in light of recent Peak Oil pronouncements by a senior DoE official, Glen Sweetnam, who told Le Monde he believes world oil production may hit a ceiling by 2015.  I’ll get to the U.S. DoE report, but meanwhile….

back at the ranch…

Let me state the following, so as not to overstate the DoD report – it talks about Peak Oil and definitely concludes that the world is all but certain to experience significant oil shortages imminently, but since the government is not yet brave enough to have a frank discussion with the public, the DoD report states that its conclusions do not reflect U.S. government views and instead of actually saying Peak Oil is here, it does a government-speak step around it like you would a turd.

Nevertheless, the DoD report indicated the world could face shortages of up to 10 million barrels of oil per day (more than 10% of consumption) as soon as 2015.  The U.K. Industry report indicated that the world faces significant oil shock distress.  Despite the jarring warnings issued by these reports, they have been all but ignored in the press, especially the U.S press.  The U.K. report did get significant attention there, not least because Sir Richard Branson’s Virgin Group was one of the report sponsors, amongst other British corporate luminaries; if billionaire Sir Branson is worried about Peak Oil, maybe the rest of us should be as well.  The U.K. energy minister, Lord Hunt, was forced to address the issue.  As is wont to happen when public officials want to appear to be doing something to address a lurking crisis without “alarming” the public, meetings are taking place with industry behind closed doors.  Policy makers have lost all credibility, so no one should trust that they’ve got this one figured out.

While the U.K. Industry and DoD reports warn about potential oil production declines that begin now, the DoE sponsored report, prepared back in 2005, stated no date for the arrival of Peak Oil, but it includes far more worrying conclusions:

First, here’s the disclaimer on the report:

This report was prepared as an account of work sponsored by an agency of the United States Government.  The views and opinions of authors
expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.

PEAKING OF WORLD OIL PRODUCTION:
IMPACTS, MITIGATION, & RISK MANAGEMENT

Robert L. Hirsch, SAIC, Project Leader
Roger Bezdek, MISI
Robert Wendling, MISI
February 2005

The report’s conclusions:

“1. When world oil peaking will occur is not known with certainty. A fundamental problem in predicting oil peaking is the poor quality of and possible political biases in world oil reserves data. Some experts believe peaking may occur soon. This study indicates that “soon” is within 20 years.
2. The problems associated with world oil production peaking will not be
temporary, and past “energy crisis” experience will provide relatively little
guidance. The challenge of oil peaking deserves immediate, serious attention, if risks are to be fully understood and mitigation begun on a timely basis.
3. Oil peaking will create a severe liquid fuels problem for the transportation
sector, not an “energy crisis” in the usual sense that term has been used.
4. Peaking will result in dramatically higher oil prices, which will cause protracted economic hardship in the United States and the world. However, the problems are not insoluble. Timely, aggressive mitigation initiatives addressing both the supply and the demand sides of the issue will be required.
5. In the developed nations, the problems will be especially serious. In the
developing nations peaking problems have the potential to be much worse.
6. Mitigation will require a minimum of a decade of intense, expensive effort, because the scale of liquid fuels mitigation is inherently extremely large.

7. While greater end-use efficiency is essential, increased efficiency alone will be neither sufficient nor timely enough to solve the problem. Production of large amounts of substitute liquid fuels will be required. A number of commercial or near-commercial substitute fuel production technologies are currently available for deployment, so the production of vast amounts of substitute liquid fuels is feasible with existing technology.
8. Intervention by governments will be required, because the economic and
social implications of oil peaking would otherwise be chaotic. The experiences of the 1970s and 1980s offer important guides as to government actions that are desirable and those that are undesirable, but the process will not be easy.

Mitigating the peaking of world conventional oil production presents a classic risk
management problem:
• Mitigation initiated earlier than required may turn out to be
premature, if peaking is long delayed.
• If peaking is imminent, failure to initiate timely mitigation
could be extremely damaging.”

There are three things to focus on here most closely:  That mitigating actions need to begin immediately; the conclusion in number 8 above, that without government action, the implications of Peak Oil are (global) chaos; and third, if we do not take timely action, Peak Oil is going to do a lot of damage.  Elsewhere in the report, it states that by timely action it means that we need to begin taking mitigating action at least 10 years prior to Peak.  If current reports regarding Peak Oil are correct, the world is now at Peak Oil production, so we’ve already left it too late.  Under this scenario, the rumblings of the global financial crisis were just the beginning of prolonged, widespread and serious crisis.

If anyone still doubts the potential for further significant crisis, here are a couple other notable Peak Oil data points, amongst others:

1) The only government attempting to take advance action, Sweden formed a Peak Oil task force in December 2005.

2) The Irish government in 2008 commissioned what it calls a “baseline review” to assess the country’s vulnerability

3)  The Welsh National Assembly published a report in 2008

4) Peak Oil caucus in the U.S. House of Representatives

5) In November 2009 two International Energy Agency (IEA) whistleblowers told The Guardian newspaper in the U.K. (hat tip to peakoil.blogspot.com) that the world has “entered the ‘peak  oil’ zone”.

6) In March 2007, the U.S. Government Accountability Office (GAO), the non-partisan investigative arm of the U.S. government (a watchdog organization), issued a report urging the development of a strategy to deal with Peak Oil, although it dated Peak Oil up to 2040 by most estimates it examined.

These additional reports or utterances by officials represent varying levels of Peak Oil concern.  I interpret them in totality and see lumbering governments coming out of a deep snooze.  A bucket of cold water would do the trick and they might just get it.

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  1. […] U.S. Department of Energy Report Sits on Shelf Gathering Dust […]

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