a bout th e author
David Hughes is a geoscientist who has studied the energy resources of Canada for nearly four decades, including
thirty-two years with the Geological Survey of Canada as a scientist and research manager. Over the past decade he has researched, published, and lectured widely on global energy and sustainability issues in North America and internationally. He is a board member of the Association for the Study of Peak Oil and Gas–Canada and is a fellow of the Post Carbon Institute.

This publication is an excerpted chapter from The Energy Reader: Overdevelopment and the Delusion of Endless Growth, Tom Butler, Daniel Lerch, and George Wuerthner, eds. (Healdsburg, CA: Watershed Media, 2012). The Energy Reader is copyright © 2012 by the Foundation for Deep Ecology, and published in collaboration with Watershed Media and Post Carbon Institute. For other excerpts, permission to reprint, and purchasing visit energy-reality.org or contact Post Carbon Institute. Photo: EcoFlight

Post Ca r bon I nst i t u t e | 613 4t h St r e et, Su i t e 208 | Sa n ta Rosa, Ca li for n i a 95404 USA

Global fossil fuel consumption has accelerated rapidly over the last few decades, requiring an enormous stream of resources to meet even current demand. Claims that future demand can be met simply by opening Pull quote here lorem ipsum new areas to exploration and increasing production dolor sit amet of relatively new resources like deepwater oil, tar sands, shale oil, oil shale, and shale gas ignore both the scale of global fossil fuel consumption and the technical challenges of producing such resources at a sufficient rate.


rill Baby Drill” was famously uttered by Republican Sarah Palin during a 2008 vice-presidential debate as a response to America’s addiction to imported oil.1 In mid-2011, Republican presidential candidate Michelle Bachmann claimed to be able to—if elected—reduce the price of gasoline to less than $2 per gallon from its thencurrent price of nearly $4.2 These politicians, despite their naiveté on matters geological, understand the correlation between energy consumption and the American Dream aspired to by the electorate. Given that fossil fuels provide the lion’s share of the world’s energy at present, and that oil—the largest source of energy in the world—has been at historically high price levels recently, what is the outlook for a supply-side solution to America’s energy dilemma?

Prior to 1850 more than 80 percent of energy consumption was provided by renewable forms of energy, mostly biomass, with the balance provided by coal. Today, 84 percent of the average world citizen’s energy is provided by fossil fuels, with most of the balance provided by nuclear and large hydropower. Fossil fuels have allowed the per capita consumption of the average world citizen to increase nearly ninefold since 1850. Increased energy availability for the production of food and other commodities has also allowed global population to increase nearly sixfold over this period. As a result, the world is consuming 49 times as much energy as in 1850, 89 percent of which is nonrenewable (oil, gas, coal, and uranium). The pace and scale of this growth are astounding. Fully 90 percent of all fossil fuels have been consumed since 1937. Half have been consumed since 1985. Conventional wisdom is that coal has been replaced to a large degree by oil and natural gas. This is not true: The average world citizen consumes the same amount of coal per capita today as in 1910, and 90 percent of all coal ever consumed has been burned since 1911. The consumption of oil merely added to per capita energy consumption, as opposed to displacing coal. Natural gas and nuclear energy added still further to energy throughput. Ninety percent of all oil consumed by humankind has been burned since 1961, and 90 percent of all natural gas since 1966. The rate of consumption

Th e Consum ption Spi r a l
Fossil fuels represent an incredibly dense and convenient form of energy—the legacy of hundreds of millions of years of fossilized sunshine preserved by generally very inefficient processes. Oil, for example, accumulated over a period of 500 million years. If we assume that 3 trillion barrels of oil will eventually be recovered and burned (the most common estimate), this means roughly fourteen and a half thousand years’ worth of preserved fossilized sunshine is consumed each day at the current global consumption rate of 87 million barrels per day (mbd).


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has accelerated rapidly over the last couple of decades: 50 percent of all oil since 1988, 50 percent of natural gas since 1992, and 50 percent of coal since 1975. Increased consumption of energy is highly correlated with rising Gross Domestic Product (GDP) and the socalled good life enjoyed by the industrialized nations of the world—represented by the Organization for Economic Cooperation and Development (OECD). The OECD countries make up 18 percent of the world’s population and consumed four times as much energy per capita as the non-OECD world in 2010. The United States, with 4.5 percent of the world’s population, consumed 19 percent of the world’s energy in 2010—on a per capita basis this is considerably more than the OECD average, four times that of China, 17 times that of India, and 49 times that of Bangladesh. A major problem going forward is that the developing world aspires to the developed world’s levels of energy consumption. China, for example, has increased its total energy consumption by 134 percent over the past decade, and is now the largest energy consumer in the world. Yet China consumes only one-quarter as much per capita as the United States. This represents a profound geopolitical conundrum for the future given the desire for growth in energy consumption in the developing world, the desire to maintain consumption and GDP growth in the industrialized world, and physical limits to the ability to grow or even maintain global energy supplies. If we look at oil—the premium fuel for transportation and the only fossil fuel that is largely globalized in terms of price—the stark inequities of consumption between the developed and the developing world become even more evident. OECD nations consume five times as much oil per capita as non-OECD nations. The United States in 2010 consumed nine times as much oil per capita as China and 22 times as much as India. China’s oil consumption has nearly doubled in the last decade, yet it consumed less than half of the oil consumed by the United States in 2010. India’s oil consumption, which has increased by 50 percent over the last decade, is still less than a fifth of the total oil consumed by the United

States. Yet all three countries are heavily dependent on imports—the United States 58 percent, China 55 percent, and India 75 percent—and all are competing in the world market for oil imports. Global oil production has been on an undulating production plateau since early 2005, despite historically high prices. In 2010, 79 percent of global production came from countries that are past their peak levels of production. Although some of these countries (such as Saudi Arabia) have significant surplus capacity and may exceed their previous production highs in the future, most countries that are significantly below their peak production levels are probably permanently past peak. The global peak of oil production is likely to occur by 2020—and possibly much sooner.

Th e Fossi l Fuel En ergy Supply Di le m m a
Economics dictate that the low-hanging energy fruit gets picked first: the large, easy to find, light oil fields; the highly productive conventional gas fields; and the thick near-surface coal seams. As these are depleted, attention turns to more difficult and higher cost deposits: deepwater oil, polar oil, tar sands, and shale oil; tight gas, shale gas, and coalbed methane; and thinner, deeper, and lower quality coal seams. The easy fossil fuel energy in the world has largely been identified and exploitation is under way or complete, and we now increasingly rely on more difficult and higher cost sources. If one wants to count up all of the hydrocarbon molecules in the ground, the only ones that count are those that can be profitably extracted. Technology and price can allow increased access to resources as technologies get better and/or prices go higher. The ultimate limiting barrier to access, however, is net energy, defined as the surplus energy available from a resource after subtracting the energy inputs required to explore for and produce it. Fossil fuel resources with a net energy of zero or less make no economic sense to recover, and unfortunately this applies to the bulk of the in situ resources remaining today.


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These concepts are mainly lost on politicians, many economists, and most industry promoters. We are assured that there is one hundred years’ worth of accessible natural gas in the United States thanks to shale gas; more than a trillion barrels of oil shale in Colorado, Utah, and Wyoming; abundant shale oil in North Dakota and Texas; and that if all else fails we can still liquefy coal and gas to produce synthetic oil. A useful concept to understand the issues in maintaining flow rates adequate to meet future demand for fossil fuels is that of the “tank” and the “tap.” The tank is the size of the in situ resource, and the tap is the rate at which it can be produced, given capital investments, infrastructure, time, and operating costs. For example, the high-porosity structural trap that defines Ghawar— the largest oil field in the world, which was discovered in 1948 in Saudi Arabia—had both a very large tank and a large tap. That highly pressured reservoir produced prolifically from low-tech vertical wells, with a very high net energy profit: 100:1 or more. Nowadays, Ghawar is getting long in the tooth, and the latest technology must be applied to keep the tap open—yet it still produces half of the Saudis’ oil. The elephants like Ghawar have been found and the easy onshore discoveries made. New discoveries are in environments that are much more hostile, resulting in much higher costs: deepwater offshore, subsalt deposits in the deep Atlantic, the polar icecaps and so forth. BP’s deepwater Macondo well which blew out in the Gulf of Mexico in 2010, sinking the Deepwater Horizon rig, would have cost over $100 million if it had been completed successfully; as it was, it ending up costing many billions of dollars and the costs are mounting. Several deepwater dry wells off the coast of Nova Scotia have cost more than $100 million each, and wells in the subsalt Santos Basin off the coast of Brazil are likely to make those figures seem like a bargain. It takes a lot more money, time, infrastructure, and effort to keep the taps open on such new discoveries—with a correspondingly lower net energy yield. Industry promoters such as the widely quoted Daniel Yergin of IHS CERA3 tell us that we can recover much

more oil from fields already discovered by using hightech “enhanced” recovery methods. This is true— however, the tap on spent fields using enhanced tertiary recovery typically only opens to a trickle compared to peak production volumes. Indeed, the first oil field in Canada, discovered back in 1858, was still producing even a few years ago—but only a few barrels a week. At the current global oil consumption rate of 31 billion barrels per year, tertiary recovery projects don’t have the tap throughput rate to come close to keeping up. This leaves us looking to purportedly vast “unconventional” oil resources like Canadian tar sands, Venezuela’s extra-heavy oil, natural gas liquids, shale oil in formations like the Bakken (North Dakota) and Eagle Ford (Texas), and oil shale in Colorado, Utah, and Wyoming. Politicians point glibly at these sources, divide current annual consumption into the vast purported quantities, and come up with decades or centuries of supply. But the problem with these resources is the size of the tap: • Tar sands require many years, large capital expenditures, and large environmental impacts to grow production. As a result, they require high prices, just to break even, of some $70–$80 per barrel for new projects. Although the Canadian tar sands have been under development for forty years, the tap is currently only open at 1.5 mbd out of an 87 mbd global oil demand. The most favorable tar sands resources in terms of thickness, depth, and concentration are extracted first. The net energy profit is low, at between 3:1 and 6:1, depending on whether the bitumen is extracted by underground or surface methods, respectively—and most of the purported 1.7 trillion barrels will not be recoverable at a net energy profit. The Venezuelan “extra heavy” oil in the Orinoco Basin faces similar limitations, and in fact, Venezuela’s oil production peaked back in 1970. • Shale oil from the Bakken and Eagle Ford formations has proven accessible with horizontal drilling and hydraulic fracturing (“fracking”) technology. However, these are relatively expensive wells at $6 million or more each, with relatively low productivity over the total well life—meaning a lot


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of wells are needed. Bakken production is now up to 0.4 mbd, which is impressive until it is compared to 2010 U.S. consumption of 19.1 mbd. Technically recoverable resources of up to 4.3 billion barrels were assessed by the U.S. Geological Survey in 20084, but even this amounts to only seven months of U.S. consumption (recently the North Dakota Survey has suggested it may be higher at 11 billion barrels, a little over a year and a half 5). But no matter what the size of the shale oil “tank,” the size of the tap is such that it will take decades to produce this oil. • Large deposits of oil shale are found in Colorado, Utah, and Wyoming, and have similarly been hyped as a significant potential resource—in this case of more than a trillion barrels.6 Unlike shale oil, which is typically a very high quality light oil, oil shale is not even oil at all: It is a precursor to oil known as kerogen, and must be “cooked” in order to turn it into oil. Although oil shale has been extracted and utilized in very small quantities in several places around the world, its large commercial exploitation has remained elusive. Shell’s experiments on in situ extraction in Colorado employ a “freezing wall” to prevent groundwater infiltration while heating rock inside the wall to several hundred degrees for several years—energy inputs that would make the net energy of recovered oil very low. The oil shales have yet to demonstrate commercial viability—so even though the tank is very large, no one has figured out how to turn on the tap at a useful scale. • Coal-to-liquids and gas-to-liquids are other schemes with very small taps and high capital and energy input costs. The Energy Information Administration’s (EIA) reference case projection, for example, calls for U.S. production of 0.5 mbd of coal-to-liquids, and negligible gas-to-liquids, by 2035.7 Biofuels and natural gas are also frequently mentioned—but false—saviors. Overall U.S. biofuels production of 0.88 mbd in 2010 is small compared to U.S.

consumption of 19.1 mbd, and the net energy gain after all inputs is very small indeed; the EIA’s reference case projection calls for a scant 2.2 mbd of U.S. biofuels production by 2035.8 Similarly, the growth in unconventional shale gas production (officially forecast to meet 45 percent of U.S. natural gas demand by 2035) cannot be produced in sufficient volumes to signif icantly offset oil- and coal-consumption given business-as-usual demand forecasts—as described in my 2011 report, “Will Natural Gas Fuel America in the 21st Century?”9. “Drill Baby Drill” proponents would likely open offshore areas on the East and West Coasts of the United States and in the eastern Gulf of Mexico, as well as the Arctic National Wildlife Refuge, all of which have been off-limits to exploration so far. These areas would likely yield new production over time with attendant environmental risks, which is the reason they have been off-limits. But they are highly unlikely to yield the 10.3 mbd the United States now depends on for imports—and even if they did would be unlikely to do so for long.

Th e Latest EI A For ecast of Globa l Fossi l Fuel Consum ption
Forecasts by the Energy Information Agency of future growth in energy consumption belie any concerns with limitations on future energy supply. They simply assume that supply will rise to meet growing demand, in parallel with rising GDP, as long as there is sufficient investment in upstream fossil fuel production. For example, the EIA’s reference case forecast released in September 2011 assumes that global fossil fuel consumption will grow by 39 percent between 2010 and 2035, and that overall energy consumption will grow by 47 percent over this period.10 This translates into a 27 percent increase in oil consumption, a 48 percent increase in gas consumption, and a 45 percent increase in coal consumption. If this actually happens, it will require finding, extracting, and burning, in a mere twenty-five years, the equivalent of 75 percent of all the fossil fuels consumed by humankind from


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the beginning of the hydrocarbon age through 2010 (72 percent of all the oil; 104 percent of all the gas; and 65 percent of all the coal).11 This is a very tall order, and although it may look good on paper in the business-asusual growth paradigm that governments operate in, it is highly unlikely to happen due to unfolding physical and economic constraints. We ignore such constraints at our peril.

The “Drill Baby Drill” mind-set belies any understanding of the degree to which fossil fuels underpin current energy systems; the physical limitations of these resources as they decline in quality and require everincreasing levels of effort, capital, and environmental risk to maintain production; and the fact that these limitations ultimately spell the end of the continual growth paradigm that has dominated economic thinking since the beginning of the hydrocarbon age. Fossil fuels will of necessity be with us for a long time to come, but it behooves us to recognize their limitations. Adopting strategies to radically reduce consumption while maintaining a reasonable quality of life are mandatory. Energy consumption cannot exceed energy supply, and if we don’t proactively manage our energy future, Mother Nature will certainly take care of it for us.



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en dnotes
1 Vice-presidential debate between Sarah Palin and Joe Biden at Washington University, St. Louis, Missouri, October 2, transcript found at http:// debate.wustl.edu/transcript.pdf. 2 R. A., “Michele Bachmann’s Plan to Deliver Cheap Petrol,” The Economist, August 18, 2011. 3 Daniel Yergin, “There Will be Oil,” Wall Street Journal, September 17, 2011. 4 U.S. Geological Survey, “3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More than 1995 Estimate,” USGS Newsroom, April 10, 2008, http://www. usgs.gov/newsroom/article.asp?ID=1911. 5 Eric Konigsberg, “Kuwait on the Prairie: Can North Dakota Solve the Energy Problem?” The New Yorker, April 25, 2011, http://www.newyorker.com/ reporting/2011/04/25/110425fa_fact_konigsberg. 6 Walter Youngquist, “Shale Oil—The Elusive Energy,” Hubbert Center Newsletter 98, no. 4 (October 1998), http://hubbert.mines.edu/news/ Youngquist_98-4.pdf. 7 U.S. Energy Information Administration, International Energy Outlook 2011, “Projections of Liquid Fuels and Other Petroleum Products (20072035),” accessed December 9, 2011, at http:// www.eia.gov/forecasts/ieo/excel/appe_tables.xls. 8 Ibid. 9 J. David Hughes, Will Natural Gas Fuel America in the 21st Century? (Santa Rosa, CA: Post Carbon Institute, June 2011), http://www.postcarbon.org/ naturalgas. 10 U.S. Energy Information Administration, International Energy Outlook 2011, “Projections of Liquid Fuels.” 11 Data from Arnulf Grübler, “Technology and Global Change: Data Appendix,” accessed December 9, 2011, at http:// www.iiasa.ac.at/~gruebler/Data/ TechnologyAndGlobalChange/; BP, Statistical Review of World Energy 2011, ( June 2011), http://www.bp.com/statisticalreview; Energy Information Administration, International Energy Outlook 2011, “Projections of Liquid Fuels.”


Overdevelopment and the Delusion of Endless Growth
Edited by Tom Butler and George Wuerthner
We have reached a point of crisis with regard to energy... The essential problem is not just that we are tapping the wrong energy sources (though we are), or that we are wasteful and inefficient (though we are), but that we are overpowered, and we are overpowering nature. — from the Introduction, by Richard Heinberg


In a large-format, image-driven narrative featuring over 150 breathtaking color photographs, ENERGY explores the impacts of the global energy economy: from oil spills and mountaintop-removal coal mining to oversized wind farms and desert-destroying solar power plants. ENERGY lifts the veil on the harsh realities of our pursuit of energy at any price, revealing the true costs, benefits, and limitations of all our energy options.
Published by the Foundation for Deep Ecology in collaboration with Watershed Media and Post Carbon Institute. 336 pages, 11.75” x 13.4”, 152 color photographs, 5 line illustrations. $50.00 hardcover, ISBN 978-0970950086, Fall 2012.

The ENERGY Reader
Edited by Tom Butler, Daniel Lerch, and George Wuerthner What magic, or monster, lurks behind the light switch and the gas pump? Where does the seemingly limitless energy that fuels modern society come from? From oil spills, nuclear accidents, mountaintop removal coal mining, and natural gas “fracking” to wind power projects and solar power plants, every source of energy has costs. Featuring the essays found in ENERGY plus additional material, The ENERGY Reader takes an unflinching look at the systems that support our insatiable thirst for more power along with their unintended side effects.
Published by the Foundation for Deep Ecology in collaboration with Watershed Media and Post Carbon Institute. 384 pages, 6” x 9”, 7 b/w photographs, 5 line illustrations. $19.95 paperback, ISBN 978-0970950093, Fall 2012.

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