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Iceland to Voluntarily Go Oil Free in 30-40 Years
scottennis writes "Yahoo is carrying a
story about Iceland's plan to wean itself from fossil fuels.
The article states that Iceland is giving itself 30-40 years to kick the oil habit completely. Of course some researchers estimate that in 30-40 years we won't have much of a choice."
The right-up said oil, but the actual article said ending fossil fuels entirely. And given the vast amounts of COAL we still have (enough that your grandchildren won't run out, assuming their willing to put up with unbreathable air and destroyed climates), it's actually a pretty significant goal.
(By Bruce Bartlett)
On April 16, Newsday, the Long Island newspaper, published a startling report that old oil fields in the Gulf of Mexico were somehow being refilled. That is, new oil was being discovered in fields where it previously had not existed.
Scientists, led by Mahlon Kennicutt of Texas A the remaining 60 percent, which is known to exist, cannot be produced economically and is therefore not included in proven reserve estimates. However, higher prices and advanced technology can easily make it profitable to expand production in existing fields.
Higher prices also encourage exploration into areas that geologists strongly suspect to have oil, but where drilling costs are too high at present. Only a small portion of the Earth's surface has ever been explored for oil, and there is no reason to believe that there are not many large deposits yet to be discovered.
If oil were really becoming more scarce, we would expect to see prices rising over time. In fact, the real price of oil, adjusted for inflation, has been remarkably stable at around $15 per barrel. Temporary price spikes by OPEC (the Organization of Petroleum Exporting Countries) have not proved sustainable because they brought forth new supplies, encouraged substitution of oil with coal or gas, and stimulated conservation by consumers and businesses.
In short, even if the new scientific evidence about oil is wrong, one can still say the world will never run out of it. Higher prices will always bring new supplies to market. As Bjorn Lomberg points out in his new book, The Skeptical Environmentalist (Cambridge University Press), $40 per barrel oil will immediately increase world reserves from a 40 years supply to 250 years because vast known oil shale deposits will become economically viable.
Of all the things we have to worry about in this day and age, running out of oil should not be one of them.
Bruce Bartlett, a senior fellow for the National Center for Policy Analysis in Washington, D.C., writes for Creators Syndicate, 5777 W. Century, Suite 700, Los Angeles, Calif. 90045.
Of course some researchers estimate that in 30-40 years we won't have much of a choice.
And others tend to disagree. Ever since the oil industry has come into existance there has been dire predictions of oil running out "real soon now," none of which have come true. Most estimates come from provable, recoverable reserves which are not static. New discoveries are made, as are new, cheaper methods to extract oil that was previously thought to be uneconomical.
I'd wager that we'll still be swimming in oil in 30-40 years.
I'm a child of the 80s, and every time we had a lecture on petroleum in grade school we were always going to run dry by 2012. When I debated in high school, we were at most going to have enough oil to last until 2020. Now I see that the date has been pushed back yet again -- these sorts of games do not rally confidence to the cause. Now that oil fields are being refilled, perhaps they'll have to re-hash their guesses yet again?
Now, I'm all for real, workable renewable resources -- and the best bet right now is with nuclear and crop-derivated oils -- but when a doomsday case is misstated repeatedly it does the cause no good at all.
The wheel is turning, but the hamster is dead.
Iceland gets about 40% of it's energy from fossil fuels, this is what it wants to get away from. All of this fuel is for cars, busses and ships. It has a huge electricity surplus from hydro and geothermal plants built after it got it's independence when European colonialization collapsed in the 40's. A lot of this energy is exported in the form of aluminum but you can't easily burn that, so hydrogen just makes a lot of sense. Iceland was also burned by leaded gas, they kept using it until some time in the 80's or early 90's, and it became the number one pollutant in the capital. This was discovered in the city playgrounds, which had hundred of times the safe limits for lead. Just image the media fiasco.
The whole running out of oil was based on the continental US oil reserves running down, but then the middle east oil was discovered. If you listen carefully the experts don't say we'll run out but that the cost will increase to a point where other fuels cost less. There will still be plenty of oil for candles and plastics, but it will be too expensive to simply burn for fuel just like we no longer burn whale blubber for fuel.
We can also make candles and plastics out of agricultural oils, and eventually we will. Whether that will be in 200 years or 2000 I can't tell you, and frankly don't care.
Case in point: ANWR. ANWR oil is going to cost more than Arabian oil, a fact that Bush+Co don't like to point out. The USGS assessment is that there is *no* oil in ANWR that is recoverable for less than $15/barrel. $20/barrel lets you extract maybe a 3rd of the reserve. Get up to $30/barrel and you can get most of it.
How much does it cost Saudi Arabia to get that same barrel? About 2 dollars .
(Current spot price is about $25/barrel due to mideast tension, but it's been as low as $17.5 earlier this year.)
We aren't going to run out of oil anytime soon. What will happen is that the price will go up as we use up the easy stuff.
Eric
"Seven Deadly Sins? I thought it was a to-do list!"
We kiss Saudi tush because they are the only major oil "swing producer". A swing producer is someone who has a large amount of excess capacity who can influence world oil supply (and thus prices) significantly by turning on their pumps. Within weeks, if they want, the Saudis can start pumping a lot more oil and thus they can cause the spot price of oil to drop a lot. (They did this for six months right after 9/11 by the way, which had the nice effect of mitigating its' impact on our economy. Give em some credit.)
The Saudis could also swing the other way easily, reducing their oil exports and thus causing oil prices to go up (since nobody else has much spare capacity to make up for the lack of supply). However the Saudi's ability drive up prices this way has constricted somewhat since the 1970s due to a number of factors: 1) the Saudi's domestic welfare program has greatly expanded and still requires oil revenues to keep their citizens happy, 2) Saudi Arabia is now a net debtor nation so net revenue shortfalls require borrowing and creditors, 3) the number of oil substitutes at a given price has risen, 4) long term price rises drive conservation response which reduces long-term demand, not in the Saudi interest 5) the US has a Strategic Petroleum reserve at its disposal that was not present in 1973.
As for ignoring friends to the north, I'm not sure we do. (If we did, I'd agree it'd be a stupid mistake.) The northern Alberta oil sands are great, and I think they are novel enough to have not really entered the generic political dialogue. Since I've had people in the oil industry mention them to me since 9/11, I'm sure the oil crowd in power in Washington knows about them. I suspect we just don't advertise it, unless we're in private talks and want to wield a big stick.
The other problems with the oil sands are, as you noted, that it only supplies 2% of our oil and it can't expand production rapidly (without throwing vast sums of money at it, as one might do in a world war.) And while the reserves are apparently huge, they can't all be extracted at that $7 price you mention. It'll get more economical as chemists and others learn how to extract the tar and refine it more efficiently, no doubt. But that takes time. And the Saudis can turn the spigots on or off at their whim, and nobody else has lots of spare capcity they can bring online rapidly at that lower price.
Except perhaps the Russians, as they start exporting more and building more facilities. This came to light a little bit more when certain middle-eastern countries started talking about using the 'oil weapon' against the US a month or two back. Iraq cut its shipments for a month, and I believe Russia boosted theirs. Which is clearly the implied threat we've been delivering to the Saudis since 9/11. Don't screw us or we'll turn to the Russians (and ensure that they have enough pipelines?) to make them the second major swing producer.
All of which is sort of ironic since we used the Saudis to squeeze the Russian economy to collapse back during the Gorbachev era (search Amazon or another equivalent for the book "Victory!" for the full story on that one.)
Verify what I say; I'm not an expert, but I have definitely been reading up on all this and thinking about it more since 9/11.
--LP
"If you listen carefully the experts don't say we'll run out but that the cost will increase to a point where other fuels cost less."
Well, that's sort of double-speak isn't it. Are you asserting that if supply-and-demand did not function, and the price remained steady that the supply would not run out, or are you asserting that the supply won't have a chance to run out because when it gets low enough the price will sky-rocket?
The USGS certainly does assert that the supply will dwindle. Their expectation is (perhaps unreasonably) that the global oil community will curtail oil sales sometime between 2030 and 2060 in order to maintain a 10:1 reserve to production ratio (which is where the US has always been, but the world market is up around 50:1 right now). As that ratio drops, something will have to happen. It would be more disasterous to suddenly "run out" then to curtail sales and strech the budget of oil out into the latter part of the century.
And just to nail the point home, these studies also take into account the discovery of new sources of oil and new techniques. This is factored into the equations as an annual growth in the oil reserves (which cannot accomodate the exponential growth in demand, of course, but every little bit helps).