Fears of global oil crisis aired at Transatlantic Energy Security Dialogue.

Jeremy Leggett column in Recharge magazine: “We are betting our entire national economic life on the hope — indeed the expectation — that the fracking boom will continue until well into the 2020s, and that, at a rate and cost we desire, significant amounts of ‘yet to be discovered’ oil will somehow be found to meet the demand.”
“If any of that proves incorrect, we have no plan, no alternative, and have given no thought to how we would respond in such a case.”The speaker is national-security expert Lieutenant Colonel Daniel Davis, a veteran of four tours of duty with the US Army in Iraq and Afghanistan. I am not a military man, but I worry just as much about the energy security of my own country as he does about his. In the UK, the government, the civil service and most of the big energy companies seem perfectly content to replicate the grand gamble under way in the US.
On 10 December, Lt Col Davis and I convened video-linked gatherings in Washington and London of people who share our concerns about the risk of a global oil crisis. We also invited key people who don’t, but who were interested in probing beyond the propaganda that energy-policy discourse seems to attract these days. [Two powerpoints, and Agenda  / Participants / Transcript of first half are appended below.]
Those joining us included retired military officers, security experts, senior executives from a wide spectrum of industry and politicians of all the main parties, including two former UK ministers.
We began with a presentation by Mark Lewis, a former head of energy research at Deutsche Bank. With this background, you might expect Lewis to be a disciple of the conventional narrative of plenty in oil markets. Many of his peers are. But he suggested that three big warning signs in the oil industry point to a counter-narrative of impending problems for supply: high decline rates, soaring capital expenditure and falling exports.
The decline rates of all conventional crude-oil fields producing today are spectacular; the International Energy Agency projects output falling from 69 million barrels per day (bpd) today to just 28 million bpd in 2035. Current total global production of all types of oil is some 91 million bpd.
Consider the spending needed to try to fill that gap.
Capex for oilfield development and exploration has nearly trebled in real terms since 2000: from $250bn to $700bn in 2012. The industry is spending ever more to prop up production, and its profitability is reflecting this trend, notwithstanding an enduringly high oil price. Meanwhile, consumption is soaring in Opec nations. As a result, global crude-oil exports have been declining since 2005. It is difficult to conflate this data and not see an oil crunch ahead, Lewis concludes.
What of the recent addition of two million bpd of new oil production from American shale: the boom that has even been cast as a “game-changer” and a route to “Saudi America” by industry cheerleaders?
Geological Survey of Canada veteran David Hughes, who has conducted the most detailed analysis of North American shale of anyone outside the oil and gas companies, offered some sobering views on this. His data shows that spectacularly high early decline rates in existing shale gas and shale oil (more correctly known as tight oil) wells means high levels of drilling are needed just to maintain production. This problem is compounded because “sweet spots” become exhausted early in field development.
As a result, shale-gas production is already dropping in several key drilling regions, and production of tight oil in the top two regions is likely to peak as early as 2016 or 2017. These two regions, in Texas and North Dakota, comprise 74% of total US tight-oil production.
Like Lewis, Hughes believes that the oil and gas industry is leading the world by the nose towards an energy crisis.
In my book The Energy of Nations, I describe how military think-tanks have tended to side with those, like Lewis and Hughes, who distrust the cornucopian narrative of the oil incumbency. One 2008 study, by the German army, puts it thus: “Psychological barriers cause indisputable facts to be blanked out and lead to almost instinctively refusing to look into this difficult subject in detail. Peak oil, however, is unavoidable.”
This blanking-out extends to the mainstream media, which has enthusiastically echoed the mantras of the oil companies, to the extent that the very words “peak oil” have been positioned as a badge of baseless scaremongering.
We should never forget that in the run-up to the credit crunch, the financial incumbency deployed exactly the same PR tactics against those warning about the fragility of mortgage-backed securities. 

Transatlantic Energy Security Dialogue: Agenda, Participants, Part One discussion edited transcript

The Three Witches: Decline rates, soaring capex, and falling exports. Presentation by Mark Lewis.

The “Shale Revolution”: Myths and Realities. Presentation by David Hughes.

 

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Scenes from The Winning of the Carbon War

Parliament Square, London, October 24th and 25th, 2014

Young people anguished about the future can protest. So long as they keep off the grass.
Young people anguished about the future can protest. So long as they keep off the grass.

“Modern capitalism is broken. I say this as a nominally successful capitalist. My experience has shown me that the system is suicidally dysfuntional. It is on course to destroy both itself, and more importantly the viable civilisation people of my generation have a moral duty to handover to our children and grandchildren. ….But it can be changed. It can be fixed.”


Moscow, October 14th, 2014

A gas pipeline carries Russian gas through Ukraine - for the time being
A gas pipeline carries Russian gas through Ukraine - for the time being

“’Let us be frank, in a comradely and hopefully constructive way’, I say with a smile. ‘Most of Europe is desperate to escape having to pay so much for Russian oil and gas exports, or even having to buy any Russian oil and gas’.”


New York, 21-26 September 21st – 26th, 2014

The NYPD find a novel way to deflate the carbon bubble on Wall Street
The NYPD find a novel way to deflate the carbon bubble on Wall Street

“I am often tempted to write ‘life, stranger than art’, in the pages of this chronicle. I can only get away with that cliché maybe once. Let it be here. The NYPD has found a way to deflate the carbon bubble. I mean the one twenty feet across, carried by protestors above their heads as they poured into Wall Street. The police popped it on one of the horns of the Merrill Lynch bull.”


Riyadh, Saudi Arabia, September 18th, 2014

Riyadh at night. By day, no solar panel-plus-storage to be seen. Yet.
Riyadh at night. By day, no solar panel-plus-storage to be seen. Yet.

“I arrive at night, and am driven from the airport into a city lit up like a fireworks display. Six million people live here. They are burning oil in power plants to provide electricity with few constraints on waste. It is akin to shovelling their national income into a furnace, at an accelerating rate every day.”


Somewhere in London, September 15th, 2014

An EV charged by leftover solar from a fully solar-powered home in cloudy Britain
An EV charged by leftover solar from a fully solar-powered home in cloudy Britain

“The world’s largest private bank predicts that by 2020 it will be possible to have a solar roof, an electric vehicle and a domestic battery bank, powering everything you need in a home, with mouth-watering economics. That energy-trio purchase will be able to pay for itself within six to eight years, while giving a 7% pre-tax annual return on investment. Such household economics, UBS concludes, will change the face of the energy industry.”


Online somewhere, July 10th, 2014

Some of the most strident warnings have been in the Conservative party's favourite paper
Some of the most strident warnings have been in the Conservative party's favourite paper

“A momentous article has appeared in the Telegraph. It argues that fossil fuels are the new subprime threat to the global economy ….(and that) a solar revolution is rushing up on society under the radar, the standard bearer of a transformative green industrial revolution that can no longer be avoided.” Some wag, unknown to me, has written on Twitter: “What world are we living in when the Telegraph starts sounding like Jeremy Leggett?”


No 10 Downing Street, London, July 7th, 2014

Delivering a letter from 150 companies to the UK PM
Delivering a letter from 150 companies to the UK PM

“Obama took personal charge of the pushback. ‘Science is science’, he said in an interview with the New York Times. ‘And there is no doubt that if we burned all the fossil fuel that’s in the ground right now that the planet’s going to get too hot and the consequences could be dire’.”


The Houses of Parliament, London, July 2nd, 2014

Juliet Davenport, Good Energy CEO: "solar is a fantastic technology"
Juliet Davenport, Good Energy CEO: "solar is a fantastic technology"

“A journalist from the Wall Street Journal seems impatient with all the British reserve on offer, and the morass of technical detail on subsidies that masks what is clearly the most fundamental of disputes. What is it, exactly, that you are worried about, she asks me. A repeat of 2011, I tell her. The government launched an ambush on the solar industry back then: a savage subsidy cut with only 6 weeks notice, aiming to decimate us. The gas industry was behind it.”


Mayfair, London, June 12th, 2014

Shell strands an asset on rocks en route to explore for Arctic oil
Shell strands an asset on rocks en route to explore for Arctic oil

“The whole concept (of the carbon bubble and stranded assets) is ‘fundamentally flawed’, Shell concludes. And worse, ‘there is a danger that some interest groups use it to trivialize the important societal issue of rising levels of C02 in the atmosphere’. …. I have been accused of many things by the incumbency over the years. Trivializing global warming is a first.”


Stockholm, May 13th, 2014

Larson ice shelf collapse, 2002: lots more to come
Larson ice shelf collapse, 2002: lots more to come

“Two teams of scientists have concluded that the melting of the vast West Antarctic ice sheet appears now to be unstoppable: that it will collapse piece by piece until the entire sheet has slid off the continent into the ocean. This would cause global sea-level to rise ten feet over the next few centuries. The generations to come will need an awful lot of zeroes when they count the cost of that.”