Refining the Peak Oil Rosy Scenario Part 3: Hubbert's revised model

Techniques of prediction of future events range from the completely irrational to the semi-rational to the highly rational. Rational techniques of predicting the behavior of a system require first an understanding of its mechanism and of the constraints under which it operates and evolves. This permits the development of appropriate theoretical relations, which, when applied to the data of the system, permit solutions of its future evolution with varying degrees of exactitude. Such a theoretical analysis provides an essential criterion for what data are significant and necessary for the solution.

from M.K. Hubbert, TECHNIQUES OF PREDICTION AS APPLIED TO THE PRODUCTION OF OIL AND GAS, in Oil and Gas Supply Modeling, Proceedings of a Symposium held at the Department of Commerce, Washington, DC, June I5-20, 1980, Edited by: Saul l. Gass, Nat. Bur. Stand. (U.S.). Spec. Publ. 631.778 pages (May 1982) (excerpt from Abstract)

After his 1956 paper, Hubbert admitted that he ran into another problem that forced him to develop another predictive methodology, as he described in his 1980 paper:

The weakness of this analysis arose from the lack of an objective method of estimating the magnitude of Q∞ from primary petroleum-industry data. The estimates extant in 1956 were largely intuitive judgments of people with wide knowledge and experience, and they were reasonably unbiased because of the comfortable prospects for the future they were thought to imply. When it was shown, however, that if Q∞ for crude oil should fall within the range of 150~200 billion barrels the date of peak-production rate would have to occur within about the next 10 to 15 years, this complacency was shattered. It soon became evident that the only way this unpleasant conclusion could be voided would be to increase the estimates of Q∞, not by fractions but by multiples. Consequently, with insignificant new information, within a year published estimates began to be rapidly increased, and during the next 5 years, successively larger estimates of 250, 300, 400, and eventually 590 billion barrels were published.

This lack of an objective means of estimating Q∞ directly, and the 4-fold range of such estimates, made it imperative that better methods of analysis, based directly upon the primary objective and publicly available data of the petroleum industry, should be derived..... "Techniques" p. 43-44

In "Techniques" (p. 45-50) Hubbert describes these better methods, which are mainly based on the idea that it was better to examine the production rate (dP/dt) as a function of Q, the cumulative oil produced, rather than as a function of time:

...It is convenient, therefore, to consider the production rate P, or dQ/dt, as a function of Q, rather than of time. In this system of coordinates, dQ/dt is zero when Q = 0, and when Q = Q∞. Between these limits dQ/dt> 0, and outside these limits, equal to zero. While it is possible that during the production cycle dQ/dt could become zero during some interval of time, for any large region this never happens. Hence we shall assume that for

                                                0< Q < Q∞, dQ/dt > 0.                          (19)

The curve of dQ/dt versus Q between the limits 0 and Q∞ can be represented by the Maclaurin series,

                                    dQ/dt = c₀ + c₁ Q + c₂Q² + c₃Q³ + .....             (20)

Since, when Q = 0, dQ/dt = 0, it follows that c₀  = 0.

Then

                                    dQ/dt = c₁ Q + c₂Q² + c₃Q³ + .....,                   (21)

and, since the curve must return to zero when Q = Q∞ , the minimum number of terms that will permit this, and the simplest form of the equation, becomes the second-degree equation,

                                    dQ/dt = c₁ Q + c₂Q².                                       (22)

By letting a = c₁  and -b = c₂  this can be rewritten as

                                    dQ/dt = aQ - bQ².                                            (23)

Then, since when Q = Q∞, dQ/dt = 0,

                                    aQ∞ - bQ∞² = 0,

or

                                    b = a/Q∞,

and

                                    dQ/dt – a(Q – Q²/Q∞).                                      (24)

After noting that equation (24) defines a parabola, Hubbert further noted:

It is to be emphasized that the curve of dQ/dt versus Q does not have to be a parabola, but that a parabola is the simplest mathematical form that this curve can assume. We may accordingly regard the parabolic form as a sort of idealization for all such actual data curves, just as the Gaussian error curve is an idealization of actual probability distributions.

 Hubbert also recognized that equation (24) can be converted into a linear equation with respect to dQ/dt and Q:

One further important property of equation (24) becomes apparent when we divide it by Q. We then obtain

                               (dQ/dt)/Q = a - (a/Q∞)Q.                                        (27)

This is the equation of a straight line with a slope of -a/Q∞ which intersects the vertical axis at (dQ/dt)/Q = a and the horizontal axis at Q = Q∞.  If the data, dQ/dt versus Q, satisfy this equation, then the plotting of this straight line gives the values for its constants Q∞ and a.

The linear equation (27) was of critical importance to Hubbert because it allowed him to estimate Q∞ and hence Q∞/2, without the need to rely upon guesstimates from experts, as he did in 1956, and which Hubbert suspected were bogus after his 1956 paper.  Hubbert comments: 

The virtue of the first of these two equations lies in the fact that it depends only upon the plotting of primary data, (dQ/dt)/Q. versus Q. with no a priori assumptions whatever. Using actual data for Q and dQ/dt, it is to be expected that there will be a considerable scatter of the plotted points as Q Þ 0, because in that case both Q and dQ/dt are small quantities and even small irregularities of either quantity can produce a large variation in their ratio. For larger values of both quantities, as the production cycle evolves, these perturbations become progressively smaller and a comparatively smooth curve is produced. If the data satisfy the linear equation, then a determinate straight line results whose extrapolation to the vertical axis as Q Þ 0 gives the constant a, and whose extrapolated intercept with the Q-axis gives Q∞. However, even if the data do not satisfy a linear equation, they will nevertheless produce a definite curve whose intercept with the Q-axis will still be at Q = Q∞. "Techniques"  (p. 52)

I will not show Hubbert’s derivation here, but Hubbert also showed that a form of the logistic equation could be derived from equation (24) above:

                              Q = Q∞ /(1+N_o e^-at ), where N_o = (Q∞-Qo)/Qo   (38)

Hubbert notes:

In equation (38) the choice of the date for t = 0 is arbitrary so long as it is within the range of the production cycle so that N_o will have a determinate finite value.

This is another important point for Hubbert, because it shows that Hubbert’s basic assumption that the simplest way to model the dQ/dt versus time, using an equation that defines a parabola, is equivalent to assuming a logistic growth curve with respect to the change in Q (cumulative oil production) with time.

Hubbert goes on to derive several other linear equations and other relationships which apparently he used in 1962, (National Academy of Sciences-National Research Council Publication 1000-D, 1962) to reanalyze the oil production, proven reserves and discovery data for the USA:

from "Techniques"  p. 66

After a detailed review of the analysis of this, and additional previous data, using these models, Hubbert concludes:

The present cumulative.statistical evidence with regard to crude oil leads to a figure of approximately 163 ± 2 billion barrels for the ultimate cumulative production in the Lower-48 states.... However there still remain geological uncertainties regarding the occurrences of undiscovered oil and gas fields, yet those are being severely restricted by the extent of exploratory activity. In the case of crude oil, there is also the uncertainty regarding the magnitude of future improvements in extraction technology.

With due regard for these uncertainties, estimates for crude oil that do not exceed that given hereby more than 10 percent may still be within the range of geological uncertainties; estimates that do not exceed this by more than 20 percent may be within the combined range of geological and technological uncertainties. Estimates for natural gas that do not exceed the upper limit of the range given above by more than 10 percent may likewise be regarded as possible although improbable. But estimates for either oil or gas, such as those that have been published repeatedly during the last 25 years, which exceed the present estimates by multiples of 2, 3, or more, are so completely irreconcilable with the cumulative data of the petroleum industry as no longer to warrant being accorded the status of scientific respectability.

Refining the Peak Oil Rosy Scenario Part 2: A trip down memory lane with MK Hubbert

A young Marion King Hubbert attending a technocracy conference cir. 1933—from http://www.technocracy.ca/tiki-list_file_gallery.php?galleryId=10&offset=25 (image 17 of 18).

Hubbert, was THE pioneering giant that brought attention to peak oil—peak fossil fuels really.  Hubbert recognized that fossil fuels (coal, oil, natural gas) are non-renewing resources, at least on the time scale of human civilization.  Hubbert also recognized that mankind was using these fossil fuels at an exponential rate such that the amounts being used were doubling every few decades.  

Hubbert did his seminal work in the area of peak oil theory in the 1950's and 60's.  He tried to warn America, and the world, about its consequences. Unfortunately for us, he failed, in that the powers that be failed to listen, and now the consequences are right around the corner.

Hubbert's work and predictions were roundly criticized and rejected when they first came out, and still today they are largely ignored by the main stream media and the government, although there are some recent signs of awaking.

How did Hubbert make his estimate in 1956?

In March 1956, Hubbert presented his paper, “NUCLEAR ENERGY AND THE FOSSIL FUELS” at the spring meeting of the Southern District Division of Production American Petroleum Institute held at the Plaza Hotel in San Antonio Texas.  He predicted that the rate of oil production in the USA would peak in 1965.  Almost as an after thought he mentioned as a secondary prediction 1970 as the peak.  He also predicted global peak oil production in 2000. 

How did Hubbert actually arrive at these predictions?  

In the paper Hubbert showed a semi-logarithmic  plot of US crude oil production versus time in years.   

Hubbert commented:

Crude-oil production from 1880 until 1930 increased at the rate of 7.9 percent per year, with the output doubling every 8.7 years.

.....

These facts alone force one to ask how long such rates of growth can be kept up. How many periods of doubling can be sustained before the production rate would reach astronomical magnitudes? That the number must be small can be inferred from the fact that after n doubling periods the production rate will be increased by a factor of 2ⁿ. Thus in ten doubling periods the production rate would increase by a thousandfold; in twenty by a millionfold. For example, if at a certain time the production rate were 100 million barrels of oil per year - the U.S. production in 1903 - then in ten doubling periods this would have increased to 100 billion barrels per year. No finite resource can sustain for longer than a brief period such a rate of growth of production; therefore, although production rates tend initially to increase exponentially, physical limits prevent their continuing to do so.

Hubbert well understood what the implications of such exponential growth in the oil production rate meant:

...., petroleum has been produced in the United States since 1859, and by the end of 1955 the cumulative production amounted to about 53 billion barrels. The first half of this required from 1859 to 1939, or 80 years, to be produced; whereas, the second half has been produced during the last 16 years.

To extrapolate this growth curve, Hubbert recognized that the rate of production (P), equals the change in the quantity of oil (dQ) per change in unit of time (dt) is given by the differential equation: 

P = dQ/dt

and, that the total cumulative amount of oil that can be produced (Qmax) is given by the total area (integral) under the curve from a plot of dQ/dt versus t from the beginning of production (t=0) to the end of production (t=¥):

Hubbert showed this relationship in general:

Hubbert then looked for estimates of Qmax, the ultimate amount of recoverable crude oil in the USA, by surveying estimates from a number of expert sources (p. 15-17):

In the case of the United States, Weeks' estimate of 110 billion barrels (based upon production practices of about 1948) was for the land area. The United States Geological Survey (1953) has estimated potential offshore reserves of the United states, based upon the productivity of comparable adjacent land areas, to be ... 15 billion barrels...the California. Division of Mines has estimated the offshore reserves of California to be 4 billion barrels. Combining this with the U.S. Geological Survey estimate for Louisiana and Texas gives ... 20 billion.   The production record of the past two decades, due in part to improved recovery practices, indicates that Week’s figure ... may also be somewhat low.  This has accordingly been increased to 130 billion, giving a total ultimate potential reserve of 150 billion barrels of crude oil for both the land and offshore areas of the United States. 

Although arrived at independently, this figure is in substantial agreement with Pratt's (1956, p. 94) figure of 170 billion barrels for the total liquid hydrocarbons of the United States. .... As of January 1, 1956, the proved reserves of crude oil were 30.0 billion barrels, while those of total liquid hydrocarbons was 35.4 billion barrels. Applying this ratio to Pratt’s figure of 170 billion barrels of liquid hydrocarbons gives 144 billion barrels of crude oil.

Armed with the above equations, the estimated growth rate in production from his semi-logarithmic plot, and, the estimated total recoverable crude oil (150 billion barrels), Hubbert drew a bell-shape curve that corresponded to these data and then over-laid this onto the existing crude oil production data plus proven reserves data for the USA:

Hubbert summarizes and concludes:  

... shown in Figure 21 a graph of the production up to the present, and two extrapolations into the

future. The unit rectangle in this case represents 25 billion barrels so that if the ultimate potential production is 150 bullion barrels, then the graph can encompass but six rectangles before returning to zero. Since the cumulative production is already a little more than 50 billon barrels, then only four more rectangles are available for future production. Also, since the production rate is still increasing, the ultimate production peak must be greater than the present rate of production and must occur sometime in the future. At the same time it is impossible to delay the peak for more than a few years and still allow for the unavoidable prolonged period of decline due to the slowing rates of extraction form depleting reservoirs.

With due regard for these considerations, it is almost impossible to draw the production curve based upon an assumed ultimate production of 150 billion barrels in any manner differing significantly from that shown in Figure 21, according to which the curve must culminate at about 1965 and then must decline at a rate comparable to its earlier rate of growth.

Almost as an after-thought, it seems to me, Hubbert briefly considers the alternative scenario, represented as the second dashed line in Figure 21 above:

If we suppose the figure of 150 billion barrels to be 50 billion barrels too low - an amount equal to eight East Texas oil fields - then the ultimate potential reserve would be 200 billion barrels. The second of the two extrapolations shown in Figure 21 is based upon this assumption; but it is interesting to note that even then the date of culmination is retarded only until about 1970.

Analogous methods were used to arrive at his estimate of a global peak in oil production in the year 2000.

Hubbert was well aware that improvements in oil recovery techniques could also increase the “known reserves.”  That is, if previously you only could recover 33% of the oil in a well and then a new process allows you to recover 45%, then your known reserves have increased by  36% (i.e., 100x45/33).  Hubbert, however, also recognized that implementation of such “secondary recovery” techniques was very slow and therefore would not substantially affect the peak production date.

Of course, history has shown that oil production in the USA actual reached its maximum in 1970, for which Hubbert is given credit for predicting:

Looking at this paper as a whole, however, I don’t think that Hubbert’s intention really was to predict the exact year of peak oil production, and if anything, that year would have been 1965, not 1970.  Rather, I think that Hubbert was trying to show that, for the then existing exponentially increasing rate of production, and the known reserves, peak oil (and other fossil fuel) production would soon be reached.  Even if the known reserves were off by 50 billion barrels, that would only delay the peak by five years from 1965 to 1970, Hubbert suggested.  It turns out that Hubbert was much closer to the truth that what many gave him credit for back in 1956. 

I mentioned that Hubbert drew a "bell-shaped" curve (Hubbert's Figure 21, shown above) based on the estimate of Qmax, the total recoverable crude that equal 150 billion barrels and knowing the shape of the growth rate in production as well as knowing the boundary conditions: at both t=0 and at t=∞, dQ/dt =0.  That is, at the beginning and end, the production rate is zero.

But exactly what was the form of this bell-shaped curve?  The 1956 article is silent, other than this rather cryptic comment from Hubbert:

With due regard for these considerations, it is almost impossible to draw the production curve based upon an assumed ultimate production of 150 billion barrels in any manner differing significantly from that shown in Figure 21, according to which the curve must culminate at about 1965 and then must decline at a rate comparable to its earlier rate of growth.

Years later in his 1980 presentation, Techniques of prediction as applied to the production of oil and gas (hereinafter "Techniques"), Hubbert also comments about this curve (now Figure 6):

The curves drawn in Figure 6 were not based upon any empirical equations or any assumptions regarding whether they should be symmetrical or asymmetrical; they were simply drawn in accordance with the areal constraints imposed by the estimates, and the necessity that the decline be gradual and asymptotic to zero. The strength of this procedure lies in the insensitivity of its most important deduction, namely the date of the peak-production rate, to errors in the estimate of Q. As 'Figure 6 shows, an increase in the lower estimate of 150 billion barrels by one-third delays the date of peak production by only about 5 years, or to about 1971. If the lower figure were doubled to 300 billion barrels, the date of the peak-production rate would still be delayed only to about 1978. "Techniques" p. 41 and 43

And, in a question period of that same presentation, in response to a question about the assumed symmetry of his bell-shaped curves, Hubbert states

Your statement that all of my curves are symmetric is not entirely correct. I have stated explicitly that the complete-cycle curve of production of an exhaustible resource in a given region has the following essential properties: The rate of production as a function of time begins at zero. It then increases exponentially during a period of development and later exploration and discovery.  Eventually the curve reaches one or more maxima, and finally, as the resource is depleted, the curve goes into a negative-exponential decline back to zero. There is no requirement that such a curve be symmetrical or that it have only a single maximum. In small regions such a curve can be very irregular, but in a large area such as the United States or the world these irregularities tend to smooth out and a curve with only a single principal maximum results. If such curves are also approximately symmetrical it is only because their data make them so.

In my figure of 1956, showing two complete cycles for U.S. crude-oil production, these curves were not derived from any mathematical equation. They were simply tailored by hand subject to the constraints of a negative-exponential decline and a subtended area defined by the prior estimates for the ultimate production. Subject to these constraints, with the same data, I suggest that anyone interested should draw the curves himself. They cannot be very different from those I have shown. "Techniques"  p. 138-139

Despite Hubbert's statements, I think that it pretty obvious that Hubbert did indeed assume a symmetric curve—that is, that the "negative-exponential decline" would mirror the exponential increase during development.  At least that is what his curve in Figure 21 of the 1956 presentation depicts. Indeed, Hubbert assumption is explicit in his statement cited above that:

the curve must culminate at about 1965 and then must decline at a rate comparable to its earlier rate of growth.   

However, one could imagine any number of different shapes on the decline side, such that the area under curve still equals Qmax.  For instance, consider these red and green curves overlayed onto Hubberts plots:

I might not have them scaled properly to give the assumed Qmax of 150 billion barrels, but, I think that they make the point that other shapes of decline curves are indeed possible.   

Perhaps Hubbert would have called these alternatives, "completely irrational to the semi-rational," or, he may have argued that these are not "very different from those I have shown."  We will never know.  Either way, however, from the standpoint of predicting the rate of decline in oil production, after the peak in production is reached, it is good to keep in mind that showing the decline curve as having a mirror-image to the growth curve is just an assumption.  

Indeed, I contend that it is just this kind of assumption that leads to the kind of rosy scenario view of peak oil that I discussed in Part 1.  We need a better model.

Refining the Peak Oil Rosy Scenario Part 1 Review and Introduction

Note: for some background information about peak oil, I put up a resources page here. This page also includes resources to a number of Hubbert's publications which are discussed in this series.

Review

In some previous posts here and here, I applied the export-land model data from Jeffery Brown et al., and, some assumptions about the decline rate in domestic oil production, to show how the typical decline in oil production portrayed by some peak oil advocates could be overly-optimistic as applied to the availability of oil in the coming years.  Dmitry Orlov’s recent article Peak Oil is History characterized the typical symmetric bell-shape curve as a "Rosy Scenario," in his view.

Here's an example of such an "Orlov-ean Rosy Scenario:"

 From Quinn's PEAK DENIAL ABOUT PEAK OIL

As you see, civilization at present, is typically portrayed as being at about the peak rate of oil production (maybe 2005), after which there is a rather gradual falloff in the production rate (e.g., about 0.5%/yr, I estimated from the above plot) followed by a much steeper decline about 20 or so years out from now. 

The point I made in the earlier articles is that, for a large oil importing nation, like the USA, the falloff in oil could be much steeper than portrayed above.  The falloff could be much steeper because the trend is for oil producing countries that export oil to the USA to increasingly use more and more of their own oil that they extracted domestically.  Therefore, the falloff in exportable oil by these countries to the USA, and elsewhere, should account for both the declining rates of oil production and the increasing rates of domestic use.  

I modeled this by assuming that USA's production would decline at 2%/yr (eye-balled from the USA's production data since its peak rate in 1980) and foreign imports would decline at 6.2%/yr (estimated by Jeffrey Brown et al. to be the projected rate of declining exports from the top 5 oil exporters) to produce the following alternative outlook for oil availability in the USA, which I call the Land-Export Model Scenario: 

The green line is the sum of the rate of domestic production plus the rate of foreign oil importation (yellow line) into the USA with the above assumptions.  

Introduction to refinement:

After further consideration, and, finding a source of world-wide oil consumption and production data, I realized that I could improve this model.  In particular, I want to make two refinements:

1) Estimate the USA's actual rate of oil production decline and estimate the decline in exportable oil for the countries that the USA actually imports its oil from.  

2) Estimate the projected decline rate of oil exports from the countries that the USA actually imports most of its oil from.

Brown indicated that the top five global exporters in 2007 were: Saudi Arabia, Russia, Norway, Iran, and UAE.  

The USA, however, imports relatively little oil from these sources as shown in Fig. 5.4 from the AER 2009:

For 2009, only Saudi Arabia (4th) and Russia (6th) figured into the top 9 countries that the USA presently gets its oil from.  Knowing the rates of oil export decline for these two countries are important, but so are the other seven countries, which could be greater or less than the rates for the top five.

Okay, let's find out!

Robert Hirsch and The Impending World Energy Mess

Here’s an interesting two-part interview of Robert Hirsch: Part 1; Part 2.

The interview promotes the book that Hirsch is a co-author of with Roger Bezdek and Robert Wendling: The Impending World Energy Mess

Hirsch's interview raises a number of points relevant to my recent posts on peak oil, and, has some interesting things to say about whether or not the government is cognizant of the impending problems that this will cause in the USA, including transport fuel rationing.

Oil Problems Dead Ahead

Hirsch expects that global oil production will decline at a rate of about 2-4% per year, and, that this would be very difficult to deal with along with a declining GDP:

In the book we look at two decline rates: 2 % and 4 % a year. Clearly the smaller the decline rate is, the less difficult it will be to deal with. 4 % is really catastrophic. 2 % is going to be less difficult but still very difficult

In our 2005 report, we worked on a world wide “crash program”, which is the best that you can possibly do. You can’t go faster than that, so it’s a limiting case. With a worldwide crash program, it’s going to take you more than ten years to catch up, because the problem is running away from you ! If you’re in a race with another person, and that other person gets a head start, even if you manage to run faster than him, it may take a very long time to catch up.

Growth Domestic Product will decline every year for over a decade, and could easily be down 20 or 30 % over this period of time

Incidently, the significant correlation between GDP and oil consumption was recently explored by David Murphy at the oil drum: EROI, Insidious Feedbacks, and the End of Economic Growth.

Of course, for a large oil importer, like the USA, the rate of decline of importable oil may be much faster than this, as demonstrated by the export-land model, because the oil-producers will increasingly use their own oil (http://crash-watcher.blogspot.com/2010/09/shape-of-oil-decline-continued.html).

More from Hirsch's interview:

Let’s say I want to make unconventional liquids out of coal or gas, and that I do it as fast as I can. You know, worldwide crash program. Look at what happened in South Africa during the apartheid. They had a big problem with the embargo on oil products. They had one coal-to-liquid plant. They decided to build another one right next to it. They had the people there, they had no permitting problem, environmental issues, or anything like this. It took them three years to build something that produced a 100 000 barrels a day (b/d). That was a crash program for them.

...

And you cannot go faster than that. It took them three years.
On the worldwide scale, you have to do the same thing everywhere simultaneously, and not for a mere 100 000 b/d, but for multiple millions barrels per day, per year ! That is the problem running away from you. Here is the key point. Oil is not like this (he shows his I-phone): this is tiny, it can change fast, you can make big changes in one year or two years. Energy is huge, there’s no way to do it otherwise, there’s just no way. It’s inevitably big.

That 3-year period for South Africa to build the coal-to-liquid plant, even when highly motivated, is reminiscent of my estimate that converting refinery plants to perform hydrocracking, to mitigate a diesel shortage, would take about 2½ to 5 years (http://crash-watcher.blogspot.com/2010/09/transport-fuel-rationing-in-usa-part-6.html).

This is why I think that once the USA finds that it can’t import oil, and, realizes that this is not a short-term thing, it will be too late to build or alter its petroleum refining infrastructure, without having to resort to rationing.  

Is the Government Ignorant or Intentionally Ignoring?

What has puzzled me for a few years now is why the government and media have been so silent about this impending problem?

Hirch comments on the government’s reaction after the 2005 release of the now-classic

 PEAKING OF WORLD OIL PRODUCTION: IMPACTS, MITIGATION, & RISK MANAGEMENT aka "The Hirch Report," authored by Hirch and the same two co-authors Bezdek and Wendling as the present book:

After the work we did on the 2005 study and the follow-up of 2006, the Department of Energy headquarters completely cut off all support for oil peaking and decline analysis. The people that I was working with at the National Energy Technology Laboratory were good people, they saw the problem, they saw how difficult the consequences would be – you know, the potential for huge damage – yet they were told : « No more work, no more discussion. »

Hirch acknowledges that Secretary of Energy, Stephen Chu, is aware of peak oil:

But I think he does not have a broad view of energy. He’s also an ideologue : he is academic in his approach of those matters. And that’s a big difference with people who have spent time in the industry, who had to make things happen, who are aware of the underlying reality.

In the book that we are about to publish, we spend 60 % on oil, and then we look at the other sources of energy: coal, nuclear, renewables. We make very strong arguments that wind, solar cells and biomass will never amount to hardly anything. A lot of people are misguided because they think: let’s just go to wind and everything will be fine.

And Robert Gates, Department of Defense is aware of peak oil:

The DoDUS Secretary of Energy, who wrote the foreword of our book. Schlesinger has continuously served as an adviser to the DoD.

In 2005, Robert Gates took part in a war game named « Oil Shockwaves », with a number of other very high senior people involved in the administration, both Democrats and Republicans. What they did is they looked at a severe cut off of world oil production, something like five percent.

That sound promising; people in high places are aware But why no official response or call to action?  Here is Hirch’s take:

I think in the case of the United States, that there are people inside the government that understand the problem. I don’t think it’s a huge number of people. And one might say that there is a conspiracy to keep it quiet.

....

I was not surprised, because if you spend some time looking at peak oil, if you’re a reasonably intelligent person, you see that catastrophic things are going to happen to the world. We’re talking about major damage, major change in our civilization. Chaos, economic disaster, wars, all kinds of things that are, as I say, very complicated, non-linear.

Really bad things. People don’t like to talk about bad things.

I think that Hirch is probably right.  Talking about really bad things is not going to get you votes.  Happy thoughts only now....

The Government will probably react to the crisis that oil shortages will bring with a “crash program,” but is unwilling to do much until then. 

That is why I think that we have to take matters into your own hands, and prepare as best you can for the coming hard times ahead. 

Here's Robert Hirsch et al.'s follow-up work from 2006 that he mentioned in the above quote, Peaking of World Oil Production: Impacts, Mitigation, And Risk Management

Transport Fuel Rationing in the USA: Part 8 What can I do to prepare for fuel rationing?

(WWII poster, from: http://www.sos.state.or.us/archives/exhibits/ww2/services/ration.htm)



Somehow, I think that if rationing was installed in the USA today, it would not provoke the “cum by ya” moment of cooperation and solidarity, as portrayed in the above WWII poster.   Americans hate gasoline rationing. For instance, this 2008 survey found that nearly 8 in 10 Americans oppose gas rationing (http://www.gallup.com/poll/107542/majority-americans-support-price-controls-gas.aspx). Nevertheless, I hope that the first seven parts of this series have made you consider that this is a real possibility, sooner or later.

Moreover, there is the possibility that if rationing were to be installed initially as a “temporary emergency measure,” subsequent events, like oil refinery destruction, peak oil, peak exported oil will cause the “temporary” to become permanent. 

So what can you do to prepare for this possibility?

Big picture view:
Start thinking about how to increase your transportation resilience to mitigate the consequences of gas rationing.  This will help prepare your mind to shift from panic to action, should rationing be installed. Just by thinking about the problem as it applies specifically to you, and then making some simple, low cost preparations, you can at least take some of the bite out of rationing. 

Here are several actions that you can take to towards this goal, presented roughly in order of increasing difficulty and/or expense:
 

1. Assess your present gasoline dependence

a. This week, have everyone in your household track their total miles driven—or do it yourself; just take a week-to-week odometer reading of each vehicle.  Is the household at or above some of the driving ranges presented above?  Are you above the present average household commuter distance of 64 miles?  If you are, this should raise a red flag.  Above a driving range of 44 miles?  You could still be in trouble during the kind of disruption that I talked about in parts1-7 of this series.

b. Try to get a good estimate of many miles per gallon each of your household's vehicles are getting.  And, no I don't mean looking up the manufacturer's or the EPA's estimate mpg, or the number that your car spits out on the dash-board.  I mean actually fill your tank up, measure the miles driven this week and then fill the tank up, again noting how much gas was used.  You may be surprised and disappointed.  Do you have vehicles getting less than the average of 20 mph?  A lot less?  Another red flag. 

Ideally, the above two steps, a and b, can been done at the same this.  Take it upon yourself to get it done for every car in your household even if you don’t drive it.  For example, next weekend take each vehicle to the gas station fill them up and note their odometer readings. Then repeat the exercise next weekend, or a shorter period, if necessary.

After this exercise, you should have a pretty good idea of what your gasoline dependence and risks are.

2.  Get every mile you can per gallon out your existing vehicles

a. Maintain your vehicles.

Get your vehicle tuned-up, inflate the tires to their proper pressure, change the air pressure, keep the outside clean and waxed, and stop lugging around excess weight in your trunk, flat-bed or on your roof (including that unused rack).   Altogether, these actions could improve your fuel economy by 10 to 20 percent. (http://www.fueleconomy.gov/feg/maintain.shtml;  http://www.edmunds.com/reviews/list/top10/103164/article.html)  

b. Stop driving like a maniac!

I don't think that you have to become a hyper-miler; just get into the habit of reducing your breaking and quick acceleration, and stop speeding.  It could gain you another 10 to 20 percent in fuel economy.

c. Pick your travel times and routes wisely.

Idling in traffic is essentially 0 mpg.  For an average 1-way commute time of 26 minutes (http://abcnews.go.com/Technology/Traffic/story?id=485098&page=1) just avoiding idling for 2.5 minutes would be a 10 percent improvement in fuel economy.  With a little bit of adjustment, can you travel during non-peak hours?  For instance, what impact would driving to work have if you left half-an-hour earlier or later?  Think about alternative routes you can take that have less stops and starts. 

After trying steps a, b and c, go ahead and repeat (1) for a week.  I'm predicting that you will get at least a 20 percent improvement in fuel economy.

Imagine what impact this could have if the USA did this as a whole—368 MG gas/d could potentially be reduced to 294 MG gas/d.  The difference (74 MG gas/d) would correspond to 3.8 MB oil/d, or, about 1/3 of the USA's present oil imports.   Amazing!

Some additional advice and resources on improving you gas mileage is presented at my other site here: http://www.squidoo.com/crash_watchers_picks-how-to-get-better-gas-mileage

3.  Avoid or reduce your driving 

a. Combining errands can improve your gas mileage because your engine will be warm for more of the trip, and, can reduce the total miles traveled (http://www.edmunds.com/reviews/list/top10/103164/article.html).

b. Can you work from home at least 1 day a week?  It would be a very good idea to get this set-up to do this now, if possible, even if only as an experiment.  Get your employer's approval and make sure you have secure on-line access to any data bases etc... that you might need from home.

c. Take public transit, car pool, bike, or walk.  Again, at least as an experiment, you should look into how you could commute to work by one or more of these means, if possible.  Locate the nearest bus routes and bike lanes, and, at least think about how you would use these if necessary.  Maybe even try it out a couple times on a non-working day.

4. Your own private Strategic Fuel Reserve

In an earlier version of this article, one commenter reported having 8-55 gallon drums of gasoline and 8 drums of diesel stored on his property.  He used a tractor with special skids to move the fuel drums around! 

I think that for most people, however, even if they could afford this amount of gasoline, or diesel, would have no place to store it.  Or, urban or suburban dweller would run into Home Owner Association restrictions, fire code restrictions or city bylaws etc.....  Your home insurance policy might exclude this.  Let’s face, it if you live in an urban/suburban area, do you want to live next door to someone who has +800 gallons of flammable fuel in storage? 

A 60-gallon metal drum is the only container approved by the Uniform Fire Code for the storage of more than five gallons of gasoline.

The Uniform Fire Code limits the amount of gasoline in residential buildings to the amount "necessary for maintenance purposes and operation of equipment," not to exceed a maximum of 25 gallons.

Note that local Fire Department regulations may supersede the Uniform Fire Code. When storing more that five gallons of gasoline it is best to check with your local Fire Department for local regulations.

http://www.chevron.com/products/prodserv/fuels/technical_safety_bulletins/ltg_storage.aspx

Nevertheless, I still think that it is a good idea to have at least 20 gallons of spare gasoline around to help smooth a transition to a rationing regime, or, even to ensure that you can get out of town if there was an emergence situation (e.g., evacuation) and the gas stations were closed. 

However, you also have the issue of gasoline and diesel deteriorating over time.  Low-boiling components can evaporate off, gasoline and diesel will oxidize and even microbial growth and activity will occur, especially at fuel-water interfaces (http://www.chevron.com/products/prodserv/fuels/technical_safety_bulletins/ltg_detecting.aspx).   

Over time, the fuel can react with the plastic containers and gradually deteriorate the container.  So stick with containers that are really designed to hold fuel.  By the same token steel containers can rust over time, and contaminate the fuel.  All of these processes will degrade the performance of the fuel.  And, all of these processes are accelerated by heat (e.g., as in gasoline stored in a hot garage).

Exactly how long can you store gasoline and then put it into your car and have your car still start?  I don’t know.  But I do know that you won’t get the same miles-per-gallon than you would with fresh gasoline. And, those oxidation products can clog up gas lines and filters, as well the small orifices in the carburetor or fuel injector (http://autos.aol.com/article/does-gas-go-bad/).  Search around the internet and you find estimates ranging from 2 to 6 months before gasoline “goes bad.”  Personally, I would not want to use gasoline older than 2 months, unless I had to. 

Adding a fuel stabilizer/extender can help increase the longevity of stored gasoline and diesel.  I think it is reasonable that a good stabilizer, proper container and good storage conditions (e.g., cool, dark and dry) could extend the longevity to a year.  Still, the safer way is to periodically rotate your stock so you never have stored fuel that’s more that 2 months old, even if you are adding a stabilizer.

It would also be useful to have a siphon so that if you were short of gasoline, you could pool the gasoline from the tanks in your cars into the most fuel efficient car, and just drive this car. 

Some additional advice and resources on gas containers, siphons and stabilizer is presented at my other site here: http://www.squidoo.com/crash-watchers-picks-gasoline-stabilizers-and-gasoline-cans

5.  Get rid of, or trade-in, your least efficient vehicle

 

If you are a multi-car family, could you make do with one less car?  As an experiment, put away the keys for the least fuel-efficient vehicle for a week or so, and see how your family adjusts.  Would this actually save you enough gasoline to be a worthwhile strategy in a gas-rationing situation?  If you try it at least then, if you had to do this in the future, you would know if it's worthwhile or not, and, you would have a routine worked out.

6. Buy a new vehicle?

I am not too keen on recommending buying a new fuel efficient vehicle at this stage, especially if it meant taking on additional debt.  However, if after trying all of these steps and, you still feel that you wouldn't be able to tolerate fuel rationing, it's an option. 

7.  Move so that you live closer to your job (or vice-versa)?

This is an option for some, but again, I am not too keen on recommending relocating to be closer to your current workplace or school if it meant taking on additional debt.   If your employment situation changed, for example, could the new location put you farther away from potential new employers?

Renters have the advantage of greater mobility here over homeowners.

Also, to be worthwhile, the move should result in the household's dependence on gasoline on gasoline being reduced as a whole.   For instance, if moving means that you can walk to public transit but your spouse has to drive a bit farther, then maybe it's worthwhile.  For instance, if moving means that you and your spouse have longer commutes but now you can car pool together, then maybe it's worthwhile.

Likewise, moving your business to be closer to your home could be an expensive proposition, and may not help, if it meant that certain key employees would then have to travel farther to your business.

As an exercise, however, try to locate places where you might want to move to and then consider what impact this would have on your household's overall gasoline dependence.

If this list makes you think of something else, or, you have already done something else, then I would love to hear your comments or suggestions:

Transport Fuel Rationing in the USA: Part 7 Past gasoline rationing plans in the USA.

(A gasoline rationing coupon page from WWII http://www.wired.com/thisdayintech/2009/11/1201world-war-2-gasoline-rationing/)






During WWII, gas rationing (actually imposed to reduce domestic rubber use) was done according to a classification scheme:

Drivers who used their cars for work that was deemed essential to the war effort were classified differently and received additional stamps. There were five classifications:

• Class A drivers were allowed only 3 gallons of gasoline per week.
• Class B drivers (factory workers, traveling salesmen) received 8 gallons per week.
• Class C drivers included essential war workers, police, doctors and letter carriers.
• Class T included all truck drivers.
• Class X was reserved for politicians and other “important people.”

The last three classifications were not subject to the restrictions. http://www.wired.com/thisdayintech/2009/11/1201world-war-2-gasoline-rationing/

Gasoline rationing briefly occurred in 1974:

And everyone knew the last number of their vehicle license plate. You had to. The oil embargo slapped on the United States and Holland in late 1973 by several OPEC nations in the Middle East had gas pumps running dry by January 1974. Mandatory gas rationing was the order of the day. When stations had gas, they followed a rationing plan that allowed cars with even-numbered license plates to buy gas on certain days. On other days, only plates ending in odd numbers were served.

The embargo was political payback for the U.S. and other Western allies supporting Israel during the 1973 Yom Kippur War. Although the embargo lasted only six months, it rumbled through the American economy like nothing since World War II.

http://www.pittsburghlive.com/x/pittsburghtrib/s_454893.html  

In 1980, following the Iranian hostage crisis, and Soviet invasion of Afghanistan, the government contemplated the standby motor fuel rationing plan:

The hostage situation in Tehran and the recent Soviet invasion of Afghanistan have continued to provoke further turmoil and unrest in the Middle East, an area which supplies over 60 percent of the petroleum consumed by the Western industrial nations. The beginning of the 1980's, therefore, is characterized by insecure foreign sources of petroleum and a potential threat of gasoline shortages, underscoring the need for the government to have in place a Standby Gasoline Rationing Plan as soon as possible so as to be prepared to manage a severe gasoline shortfall.

....an approved plan would remain in standby status and could be imposed only if the President found that putting the plan into effect is required by a severe energy supply interruption or is necessary to comply with obligations of the United States under the international energy program. EPCA sec. 201(d) defines a severe energy supply interruption as a national energy supply shortage which the President determines has resulted or is likely to result in a 20 percent shortfall, with respect to projected normal demand, of gasoline and middle distillate fuels for a period of at least 30 days. ...

http://ntl.bts.gov/lib/12000/12200/12291/12291.pdf  

Of course, all of these past instances occurred at times when the USA’s gasoline use was much lower than today and/or the USA’s domestic oil production was higher than today.

So what would gas rationing look like if it happen today?

After running through this exercise with me, it should be clear to you by now that gasoline rationing would have to start quickly after a Disruption of the type that I have hypothesized in this series. The SPR, or, re-tooling oil refineries to make more diesel, will not save us.  Moreover re-tooling would reduce the gasoline ration to households.

You can see from the calculations in Part 4 what the ration would have to average: about 1-2 gallons of gas per household per day, depending upon the amount of continued Western Hemisphere imports.

I don't care to speculate here exactly how the gasoline would get divvied up, and who would get priority, after the critical uses are served. I would direct you to the standby motor fuel rationing plan for an example of how it might work. I expect that the government already a plan in place, or at least, they better have.

Transport Fuel Rationing in the USA: Part 6 Can re-tooling oil refineries save us?

In Part 4 (http://crash-watcher.blogspot.com/2010/09/transport-fuel-rationing-in-usa-part-4.html) of this series it became pretty clear that my proposed oil import disruption from sources outside of the western hemisphere would cause a major 35% shortfall in oil. In particular this would cause the amount of available dfo (diesel) to fall short of the USA’s critical infrastructure needs. An about 27 MB dfo/d shortfall, I estimated in part 4.

The question I address here is, could oil refineries adjust their refining processes to produce relatively more diesel and less gasoline, to help mitigate this diesel shortfall?

A portion of Csere’s 2008 article sheds some light onto this:

Al Mannato, a fuel-issues manager at API, explains that oil refineries tend to fall into two categories: catalytic cracking and hydrocracking. Most U.S. refineries are set up for catalytic cracking, which turns each barrel of crude oil into about 50-percent gasoline, 15-percent diesel, and the remainder into jet fuel, home heating oil, heavy fuel oil, liquefied petroleum gas, asphalt, and various other products. In Europe and most of the rest of the world, refineries use a hydrocracking process, which produces more like 25-percent gasoline and 25-percent diesel from that barrel of oil. So the rest of the world is already maximizing diesel production. In fact, despite using a refining strategy that minimizes the production of gasoline, Europe still ends up with too much of the stuff, so it exports it to America—about one of every eight gallons of gasoline that we consume.

Doing so—and here’s the Catch-22—would reduce the output of gasoline and likely increase its price. Moreover, such a switch, Mannato explains, amounts to a major refinery change that would take 5 to 10 years to accomplish. Building some new hydrocracking refineries would add diesel capacity without squeezing gasoline supplies, but due to their nearly universal unpopularity, there hasn’t been a new refinery built in America since 1979.

Despite the merits of modern diesels, anyone who expects them to solve our energy problems stands to be disappointed.

Meanwhile, Americans are already using most of the diesel fuel that our refineries produce, so if sales of diesel cars take off, keeping the diesel flowing here will put further demands on tight worldwide diesel supplies and probably cause the price to rise even more. Our oil industry could, of course, start converting its refineries from catalytic to hydrocracking and start producing more diesel and less gasoline. (http://www.caranddriver.com/features/08q2/should_american_vehicles_go_diesel_just_when_the_world_is_running_short_of_it_-column)

Mannato’s explanation gives some insight into how much diesel USA refineries could theoretically be capable of producing, if they all shifted from gasoline-centric catalytic cracking, to diesel-centric hydrocracking.

Mannato estimated that shifting from catalytic cracking to hydrocracking of oil would:

1) decrease gasoline production by 50% (i.e., “50-percent gasoline” to “more like 25-percent gasoline”

2) increase dfo production by 166% (i.e., “15-percent diesel” to “25-percent diesel”)

(Notice that the increased amount of diesel produced is relatively less than the decrease in the amount of gasoline produced; more on this important point later.)

I have applied these percentages to my previous estimates of gasoline and dfo usage in the USA based on the numbers I extracted from the AER 2009 report, and, for my hypothesized “disruption” event, to calculate the maximum changes in proportions of gasoline versus dfo that might be attainable in the USA:

Present usage, per AER 2009 report levels:

gasoline: 368 MG gas/d (catalytic cracking) ===> 184 MG gas/d (hydro-cracking)

diesel: 152 MG dfo/d (catalytic cracking) ===> 253 MG dfo/d (hydro-cracking)

Predicted usage during the disruption (i.e., a 35% shortfall in oil):

gasoline: 240 MG gas/d (catalytic cracking) ===> 120 MG gas/d (hydro-cracking)

diesel: 99 MG dfo/d (catalytic cracking) ===> 164 MG dfo/d (hydro-cracking)

The good news is that now we are making enough dfo to meet the USA’s critical dfo requirements, which I estimated to be about 126 MG dfo/d. We are also still making enough gasoline to meet the USA’s critical dfo requirements, which I estimated to be about 52 MG gas/d.

The bad news is that this has been done at the cost of producing much less gasoline (i.e., whooping 120 MG gas/d less) for the relatively smaller amount of diesel gained (i.e., 65 MG dfo/d more). That would mean a much more severe gasoline ration than I originally calculated in the first post, which assumed no change from catalytic cracking to hydro-cracking.

For instance, after setting aside the gas needed for critical uses, I get:

120 MG gas/d – 52 MG gas/d = 68 MG gas/d

Per USA household, that leaves: (68 MG gas/d) / 105 M hh = 0.65 G gas/d•hh

This is a lot less than the 2.2 G gas/d•hh ration that I originally estimated (in Part 4), when I assumed no change from catalytic cracking to hydro-cracking. I don’t think that many households in the USA would be able to function very well on 2/3 of a Gallon of gasoline per day!

A better solution would be a partial conversion from catalytic cracking to hydro-cracking, to provide just enough diesel to meet the critical dfo needs and not make the household ration of gasoline so severe.

For instance, consider the case where we only convert one-half of the refineries over to hydro-cracking (that is, a “combo” of the two cracking processes):

Present usage per AER 2009 report levels:

gasoline: 368 MG gas/d (catalytic cracking) ===> 276 MG gas/d (combo-cracking)

diesel: 152 MG dfo/d (catalytic cracking) ===> 202 MG dfo/d (combo-cracking)

Predicted usage rates during the disruption (i.e., a 35% shortfall in oil):

gasoline: 240 MG gas/d (catalytic cracking) ===> 179 MG gas/d (combo-cracking)

diesel: 99 MG dfo/d (catalytic cracking) ===> 131 MG dfo/d (combo-cracking)

Now we have just enough to meet the critical uses for diesel (126 MG dfo/d), and, we have gained back about 59 MG gas/d over that meager 120 MG gas/d amount available from an all hydro-cracking process.

Again, after setting aside the gasoline needed for critical uses, I get:

179 MG gas/d – 52 MG gas/d = 127 MG gas/d

Per US household, that leaves: (127 MG gas/d) / 105 M hh = 1.2 G gas/d•hh

This is still a lot less than the 2.2 G gas/d•hh ration that I originally estimated in Part 4, assuming all catalytic cracking, but it is substantial higher than 0.65 gas/d•hh, assuming all hydro-cracking.

The estimated ration, 1.2 gallons per household per day, gives a total average daily driving distance of only 24 miles per house hold, assuming 20 mi/G. That’s 20 miles less than the total average daily driving distance that I originally estimated in Part 4, but at least the critical infrastructure needs for both gasoline and diesel are met.

Okay, that was the bad news, here’s the really bad news.  Repeating a portion of that quote from Csere’s article:

Moreover, such a switch, Mannato explains, amounts to a major refinery change that would take 5 to 10 years to accomplish. Building some new hydrocracking refineries would add diesel capacity without squeezing gasoline supplies, but due to their nearly universal unpopularity, there hasn’t been a new refinery built in America since 1979.

I think it’s safe to assume that, in the present economy and political climate, no new oil refineries have been built since Csere’s 2008 article was written. And even if it took half the time, e.g., to convert only half the refineries, we are still looking at a 2½ to 5 year period. And of course, as Mannato pointed out, during the change-over period, the lack of output from that refinery would squeeze the gasoline and dfo supply even more.

Based on this analysis, I would not change any of my predictions:

1) A sudden disruption of oil import would still impact the critical infrastructure uses of diesel more severely than the critical infrastructure gasoline uses, because the conversion of significant numbers of existing refineries to perform hydrocracking would take at least 2½ to 5 years.

2) A more gradual decline in oil imports, such as predicted by the export-land model, will still cause diesel shortfalls sooner than gasoline shortfalls, unless there was a concerted effort on the part of oil refining company’s to convert their plants to hydrocracking refineries. In the present economy and political climate, I don’t see this as very likely.

3) Even if there were to be a steady movements towards producing increased amounts of diesel (and I have not seen evidence to support this), clearly I would not recommend owning a diesel vehicle, at least if you are going to rely on conventional supplies of diesel, because the competition for diesel for mostly critical uses, will always jeopardize your access to the conventional supplies.

And now, I can add a fourth point:

4) If there is an extended shortage of diesel due to an oil import disruption, the effort to convert USA refineries to produce more diesel for critical infrastructure uses, will take too long to prevent shortages in diesel, and, that conversion will directly, and almost doubly, cut into the amount of gasoline being produced, thereby making household rationing more severe.