|The Case for Modeling World Energy Flow|
Recent DevelopmentsGlobal Oil and Gas Depletion: An Open Letter to the Energy Modelling Community, by R.W. Bentley [2005 October 31]
"The approaching peak in conventional oil requires a number of other issues to be examined. These include the need for far better oil reserves data in certain countries, better modelling of the date of peak, updated predictions for CO2 emissions, understanding the impacts on GDP, and evaluating the effectiveness and fairness of the market in response to a dwindling resource. Integrated energy modelling is likely to be an important tool in dealing with the complexities that lie ahead."
Dr. Richard Duncan has graciously offered his Heuristic Oil Forecasting Method/World Oil Forecasting Program to interested parties. These models run under Stella® which is available from High Performance Systems, Inc. Dr. Duncan's models are available for the world and countries combined in regional models for the WORLD, Africa, Asia / Pacific, Europe, FSU (Russia+), Middle East, North America, and South/Central America
"System dynamics modeling has been used for strategic energy planning and policy analysis for more than twenty-five years. The story begins with the world modeling projects conducted in the early 1970s by the System Dynamics Group at the Massachusetts Institute of Technology. During these projects the WORLD2 and WORLD3 models were created to examine the "predicament of mankind" -- that is, the long term socioeconomic interactions that cause, and ultimately limit, the exponential growth of the world’s population and industrial output...."
OverviewIn 1986, the team of Gever, Kaufmann, Skole and Vorosmarty produced Beyond Oil, the results of a project that used computer modeling and complex systems analysis techniques to examine the impact of fossil-fuel depletion (primarily oil) on United States society, industry, and agriculture. They analyzed a variety of scenarios, presented the results, and made recommendations for social and government policies that would minimize the most severe impacts of declining energy resources.
Their study concluded that the US could follow any of several paths, which could be loosely described as:
In their conclusions, they urged the US to pursue (2): embark on a program that would create incentives to increase conservation and to motivate a more rapid transition to non-fossil-fuel sources of energy. They proposed a collection of specific public policy initiatives that would begin a sweeping transformation in how we use energy and where we get it.
As we know, in the two decades since they began their study, we have taken neither the "hard path" nor the "soft path", choosing to follow instead scenario (3). The continued low cost of oil- and gas-based energy killed interest in the hard path - it was too expensive, with no certainty of return on the investment. Nor did we have the national will to commit to (2). Instead, we used our collective national wealth to purchase and secure from abroad whatever energy we needed, when we needed it, rather than investing in conservation and renewables. The fraction of imported oil has risen from around 35% at the time of the Beyond Oil study to nearly 60% today, and will continue rising. Two consequences of that dependence: the impact on balance of trade (we currently spend some $100B annually for imported oil), and the necessity of extending, at considerable cost, our military forces to protect sources of supply and supply lines.
Only since the 9/11 terrorist attack has our dependence on imported oil undergone renewed scrutiny, because so much of it is supplied by Middle Eastern countries. Yet, US energy policy has so far focused almost exclusively on extracting what little remains domestically, and trying to ensure the security of nations and supply lines that provide our imported oil.
Oil, Agriculture, and PopulationLooking at the world picture, there are some trends that could present serious difficulties in the decades ahead. Human population continues to rise, although the rate of increase is slowing faster than earlier predictions. We can expect our numbers to reach some 10 billion by mid-century, if present projections hold.
Enabling that growth is the "green revolution" of crops that demonstrated great improvements in yield per acre, at the expense of larger doses of fertilizers and pesticides. At the same time, the US style of industrialized agriculture has spread to all developed countries with an agricultural basis, and to most developing countries as well. Agriculture that once relied primarily on human and animal power is now almost 100% dependent on fossil fuel, to feed nations of increasingly urbanized populations. The large and growing trade in grain and other food between nations is no longer optional, but vital to sustaining human life in its present numbers in many countries. In addition to farming and transport, fossil fuels are essential for fertilizer manufacturing as well as for herbicides and pesticides.
The question is sometimes posed "When will we run out of oil?" That's the wrong question, because the technically correct answer - "Not in our lifetimes" - tends to generate a false sense of energy security. For at least another century, there will be oil reservoirs somewhere on this planet producing oil.
The more pertinent question is, "When does the supply of oil fail to meet demand?" The three major energy crises since 1970 were driven by politics, war, and other human disagreements. But as every informed person knows, at some point in the future our supply of fossil fuel will fail to meet demand, for reasons based on physics and geology.
We're accustomed to hearing "At present rates of use, our supply of (oil / gas / coal) will last for XX years." This also lends a false sense of security - misleading for two reasons:
Some projections of world oil supply indicate a production peak, and subsequent failure to meet demand, before the end of this decade; more optimistic estimates place it 20 to 30 years from now. From that time on, it's unlikely that any amount of effort will increase the rate at which the world pumps oil from underground, and production will begin to decline. At the same time, growth in demand will not come to a sudden halt. We can expect bidding for the remaining oil to be very competitive, raising prices steadily or perhaps dramatically. We can expect a growing diversion of oil from industry and transportation to agricultural use, and the cost of food to track rising prices for energy. Oil-producing nations, seeing the writing on the wall, may begin to constrain exports, hoarding their reserves for a few more years of domestic consumption. The temptation to use military means to secure a few more years of supply may be overwhelming.
Given its near-total reliance on oil and gas now, it's obvious that agriculture in the future must change dramatically as fossil fuel availability fails to keep up with demand. If human food supply and well-being are to be sustained at anything close to present levels, massive amounts of energy for agriculture and transportation will have to come from somewhere other than fossil fuels.
Fast-forward to 2050. During the previous 20 to 40 years, availability of oil and gas will have dropped to a fraction of what they were in 2010. The world, if it is working in any way like the world we have today, must have transitioned by then to energy sources that are not primarily oil and gas. Forty years is a very short time, historically speaking, to undergo what will undoubtedly be some of the most wrenching and dramatic changes in human history. How will we get from here to there?
Two Opinions about Our FutureGiven the state of the world today, it's possible to make two equally-plausible projections of our future, with radically different outcomes. A well-educated person, informed with the facts about fossil fuels and working from the same starting conditions (the world as it is today), could make a persuasive argument for either outcome.
As long as we are simply expressing and discussing opinions, all arguments have equal claims to validity.
Example 1: Project IndependenceThe Nixon Administration's "Project Independence", launched after the oil shock of 1973, promised to free the United States from its dependence on imported oil by 1980 by mining and processing "shale oil". Many intelligent people bought into this idea, convinced of its feasibility - but system dynamicists, like those who ran The Limits to Growth computer models, knew it was impossible, and could demonstrate this fact with their models. Without the benefit of complex-systems analysis, irrationally optimistic concepts like "Project Independence" may be launched repeatedly, in the end wasting time, effort, and financial capital, and reducing our chances of finding the right direction by taking us down the wrong path. Worse, it obviously wastes energy that, in retrospect, could have been put to better use.
Even a sophisticated analysis with many interrelated factors - like a complex spreadsheet - is only a static picture of energy flows. It can not adequately model time-related interactions and dynamic relationships between energy supply and demand, energy prices, demand elasticity as a function of price, and the levels of energy and capital investment required to enable alternative sources, as cheap fossil fuels decline.
Example 2: Hydrogen, Fuel Cells, and the Freedom CarThere has been much recent publicity about hydrogen and fuel cells as the answer to our impending oil shortages and air pollution problems, particularly in regard to the transportation sector. The auto companies, with US government agreement, abandoned a government-subsidized program directed at bettering fuel economy, replacing it with a longer-term research program focused on hydrogen and fuel cells. George Bush's State of the Union speech1 specifically touted hydrogen as the answer to some of our problems. Even Amory Lovins is getting into the act: his engineers have built a lightweight super-efficient "Freedom Car" prototype powered by hydrogen and fuel cells, and his recent book extols the virtues of hydrogen.
Few advocates of conservation and alternate energy have better credentials than Amory, yet he glosses over the obvious question: where will all the hydrogen come from? Currently a steam reforming process can generate hydrogen from natural gas; in the longer term, we could transition to hydrogen derived from electrolysis. This of course would require unprecedented quantities of electrical power. Amory's vision includes thousands of wind generators, and hundreds of square miles of solar cells in the desert, generating not only enough power to support the major part of future electrical demand, but additionally using the massive excess to create trillions of cubic feet of pure hydrogen for transportation and localized electric power generation.
It's a compelling vision, but is it feasible? How many wind generators can we build and install in a few decades, and how many square miles of solar cells can we make? How many factories must be financed and constructed to make them? How much energy must be diverted from the energy flow we now use, to make them? This large an endeavor must take an appreciable fraction of the energy we now get from fossil fuels - what current uses and users of energy will be sacrificed? Can it phase it in rapidly enough to offset concurrent declines in oil and gas availability?
As with "Project Independence", the technical feasibility of individual components of this vision, like fuel cells, are easy to demonstrate. Converting the vision to reality on the scale of the entire transportation and utility sectors of the global economy is quite another thing. A complex-systems analysis can tell us whether such a transformation is possible. By running many different scenarios and reviewing the outcomes, it can guide us by showing us what path leads to a future with the greatest probability of success, the lowest impact to the environment, and the least hardship for humans at all levels of the economic ladder.
Example 3: The Reality of Depletion vs. UCS Clean Energy BlueprintUCS recently published a study called "Clean Energy Blueprint" with assistance from the American Council for an Energy-Efficient Economy and Tellus Institute. This advocates a path toward a future energy mix that has a strong conservation component ("negawatts"), with reduced reliance on nuclear and coal sources, and increased investment in renewables. Oil consumption is reduced primarily by improving automobile efficiency.
For generating the majority of US electrical power, the study advocates an accelerated shift toward natural gas, because its pollution impact is lower than that of oil or coal, and CO2 emissions are lower per unit electrical energy generated. With the combination of renewables and increased efficiency, US natural gas use would be more than 30% lower than the "business as usual" scenario by 2020 - but still 8% higher than consumption in 2000.
Improvements in efficiency, reductions in fossil fuel use, and associated enormous savings to consumers are all obviously good things. What's not apparent, however, is whether the authors of the study took note of available information2 that casts serious doubt on the ability of the US natural gas industry to produce any increase in supply above what they are producing now.
There is good evidence that US natural gas production peaked recently (2001), declined by up to 5% in 2002, and is likely to continue declining further each year in the future. Moreover, although we are importing large amounts from Canada, indications are that Canada's production will similarly peak in 2003 or 2004, and decline after that. Imported gas from Canada actually declined in 2002, the first time since 1984. The industry finds itself running faster and faster (drilling more gas wells) just to keep up with previous production levels. The average life of a new gas well has dropped to 7 months. Meanwhile, US government projections are for a 35% increase in natural gas demand, in part to supply the 275 new gas-fired electrical generating plants going on line or to be completed in the next 6 years.
Although the popular impression is that impacts of oil and gas depletion are some future generation's problem ("35 years at current rates of consumption", etc.), this is not the case. The North American natural gas industry is wrestling with depletion right now, and it's the primary factor behind the rapidly escalating price of gas this winter. Unlike oil, we cannot simply import all the natural gas we want. Liquefied Natural Gas (LNG) is the only way to transport if from overseas; at present we only get about 1% of our gas as LNG, and ramping up from that level will be slow and costly. As the cost of natural gas skyrockets, any flexibility to switch from gas to other energy sources will favor the non-gas source. But oil prices are rising too, hit by the double-whammy of the Venezuela strike and impending war with Iraq.
Obviously the US would be better off following the recommendations of Clean Energy Blueprint than the "business as usual" alternative. The natural gas shortfall will be much more severe under the latter scenario.
But the reality of natural gas depletion could throw all the well-argued conclusions of Clean Energy Blueprint out the window. Given the apparent limits to natural gas availability, we will see during this decade a resurgence in coal use, with attendant pollution and CO2 consequences, and greater pressure to return to our abandoned nuclear construction program - quite the opposite direction from that advocated in Clean Energy Blueprint.
Bigger than Hydrogen-Powered SUVsThe hydrogen-powered fuel-cell automobile may or may not come to pass. But the issue is more serious than whether or not our children will transport themselves in anything resembling the private automobile. If the more pessimistic projections of the mismatch between energy supply and energy demand are anywhere near right, the very survival of the majority of humans now younger than 30 or 40 years old may be in doubt. At the very least, declining energy sources could trigger an era of resource wars, growing poverty and isolationism, and mass starvation much worse than the famines now plaguing many nations in Africa.
This may be considered a radical or extremist view. Yet, oil and gas depletion are facts that none can deny; it's not a question of "if", but rather, "when?" and "how fast?". The difference between pessimistic and optimistic projections is barely 20 years, less than a generation.
Getting from here to any "optimistic" future requires an unprecedented transition from our near-total reliance on fossil fuels to a vastly different mix of renewable energy sources. Other than hydropower, the investment in alternatives made thus far has been so small that it can be characterized as negligible. Do we still have time? Is there a feasible mix of conservation and renewable sources that can replace the fossil fuels we now consume in such prodigious quantities?
Doing the NumbersThese questions can be answered, but not quickly or easily. Simply engaging in debate, no matter how well informed, is not likely to bring us closer to the truth or show us the way. There is no substitute for informed analysis and real numbers.
Although often not directly appreciable to our senses, energy - unlike more abstract human creations like money - is a concrete thing, which can be measured, tracked, and monitored. The first law of thermodynamics tells us that we cannot create energy from nothing; we can only transform it from one kind to another. Detailed and complete statistics exist on government and energy-industry Internet pages that thoroughly document energy discovery, production, and use in the US and around the world.
We can model energy flow between nations, through homes and industry, incorporating reserve estimates and projecting future energy scenarios from extrapolated current use.
If there is any feasible path from here to a livable future, a comprehensive model of world energy flow can help us find and follow that path. Supplied with information on rates of extraction, projections of demand, and known reserves, it can show us fossil fuel availability in the future, by type, by year, and by geography. Using available information on energy use by agriculture and the food industry, it can show us the consequences of not making the right decisions, or of delaying decisions. Furthermore, given best estimates of "energy return on energy invested" (ERoEI), it can show us what mix of conservation, investments in alternatives, and uses of our remaining "cheap" fossil fuels could lead to the best outcome for humanity.
Beyond Oil and The Limits to Growth pioneered methods of applying dynamic systems analysis to resources and population. Although widely misinterpreted as "predictions" that foretold our future, these computerized models of complex systems actually showed us that we had choices, and what the consequences of making those choices, or delaying decisions, might be.
Policy Decision ToolFew will deny that humanity now sustains itself in part by an enormous reliance on fossil fuels. Most will also agree that, within a matter of decades, this once-vast treasure will be largely gone. Without drastic changes in how we obtain and use energy, the outlook for our species is grim. It takes little analysis to demonstrate that we cannot go back to a pre-coal 18th-century way of life and sustain our present population. If, as many believe, industrial civilization is approaching a crisis in sheer numbers and in its relationship to the planet, and change must happen to avert it, the obvious question is: how and when do we enact this change? What form does it take? How rapidly must it proceed to avoid massive disruption and drastically-reduced standards of living?
Beyond Oil illustrates the impact of delaying necessary decisions to invest in alternative sources of energy. The figure shows two curves - one starting with an early investment in alternative (renewable) sources, and the other postponing that decision until well into energy depletion and decline. Resulting energy availability is dramatically reduced in the delayed-investment scenario.
What's happening is that the energy required to build an alternate-source infrastructure must be diverted from the declining supply of ever-more-expensive fossil fuels; some current uses of energy must be sacrificed. The longer we wait, the deeper the plunge into energy scarcity before new energy sources begin to replace those that are disappearing.
The decline of fossil fuel-based energy supply is, in human terms, a slow-motion "event" that covers decades - yet its implications to the survival of people and nations are immense. Planning for something of this magnitude is properly the business of governments and extra-national organizations, institutions that are potentially best equipped with budgets, leaders, and the long-term vision needed to sustain an effort of the magnitude that will be required.
Earlier, two scenarios projected two possible but widely-divergent futures. It is unlikely that the optimistic scenario will play out without a deliberate effort on the part of industrialized society, starting this decade, to invest a portion of its current energy "income" in alternative energy sources. As we move closer to the moment when energy demand finally and permanently exceeds supply, we still see few indications of awareness of these choices. Instead, policies are enacted that maintain energy prices at historically cheap prices, discouraging investment in conservation and alternatives.
Convincing the institutions (governments and NGOs) that have the authority and influence to make a difference - to start slowly turning this "business as usual" ship - will take more than opinions and arguments. Raising awareness of an impending crisis, that most now believe to be some future generation's problem, will require compelling data and analysis.
Not all will be convinced of course, and any technology can be subverted to a political agenda. But it has a far better chance of opening minds and informing policy than simply repeating old arguments. We are now thirty years into the 70-to100-year future examined by The Limits to Growth, and Beyond Oil is approaching twenty years old. Our information is better, the standard desktop PC is a hundred times more powerful than the mainframes they used, and we are overdue for a reappraisal of where we are going - what do we want our future to be, and what is the best way to get there? Modeling world energy is a tool to help us find the way.
Dick Lawrence Richard.lawrenceintel.com (978) 553-6072
Backup Information and Footnotes:
Requirements for a ModelThe model's results are only as convincing as its inputs and the transparency of its operation. All sides of the discussion must be able to view and agree on the starting conditions, understand the parameters that control depletion and demand, and see how they lead to specific conclusions.
Unlike previous models, I would advocate for an energy flow model that exhibits the characteristics of accessibility and visibility (transparency). Accessibility means that anyone, with a reasonably equipped desktop PC, can run the model. They would not need special hardware or compilers to run or to modify the model. Visibility means that anyone with a reasonable familiarity with spreadsheets (or other standard form) could look at, understand, and - if desired - modify the starting conditions or operating parameters, without going into program source code and needing to recompile it. Moreover, the program itself would be written in a language in common use, using readily available compilers, that would permit easy understanding and modification.
Gever, Kaufmann and the others on the Beyond Oil team used a Prime minicomputer to run their analysis, written in Fortran. The Limits to Growth, more than a decade earlier, used an MIT mainframe. The average home PC today has 100 to 1000 times the computing power of those machines, and vastly greater memory and storage. An updated version of an energy modeling program, ideally, would be written in C or C++, would run on most desktop machines, and the input data (starting conditions, operating parameters) would be user-visible and user-modifiable in Excel spreadsheets. The model would output results to a similar tabular form, or it could create graphs and charts directly.
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