Peak Oil and Transportation Demand Management TDM

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Peak Oil and Transportation Demand Management
(TDM)

• 2007 Rocky Mountain ACT Conference
• April 12 - 13, 2007
• Kathy Leotta, PB and Chris Hagelin, Go Boulder

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Our Oil Challenges
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Global Oil Consumption
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In U.S., Transportation Sector Consumes Largest
Share
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U.S. Transportation Sector Highly Dependent on
Petroleum Products
Consumption of Transportation Energy by Fuel, 2003
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We Increasingly Rely on Imports
Net Importer
US Peak
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ANWR Would Not Significantly Change Our Need for
Imports
Source EIA Annual Energy Outlook 2006 with
Projections to 2030, February 2006
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Share of World Oil Reserves, 2005
Well Increasingly Rely on Oil from Less Stable
Parts of the World
Europe/Former Sov. Union
Middle East
Western Hemisphere
Source Energy Information Administration, Long
Term Outlook for Energy Markets, Presentation by
Guy Caruso to Energy Security Group November 29,
2006
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The Theory of Peak Oil Production
Typical Regional Oil Production a.k.a. Hubberts
Curve
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Most Oil Producing Regions Output has Peaked
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The Shape of the Curve

• An analysis of peaking for individual countries
  indicated that
• The onset of peaking can occur quite suddenly,
• Peaks can be very sharp, and
• Post-peak production declines can be
  comparatively steep (3 - 13).
• Can only be seen in rearview mirror

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Imagining Oil Production Post Peak, With
Different Decline Rates
0.5 Annual Decline 1.0 Annual
Decline 2.0 Annual Decline EIA
Late Peak Scenario
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Imagining Oil Production Post Peak, With
Different Decline Rates
0.5 Annual Decline 1.0 Annual
Decline 2.0 Annual Decline EIA
Late Peak Scenario
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Debate on Timing of Peak Oil
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Peak Oil Timing and Boy Who Cried Wolf Syndrome
Unless a mitigation crash program (mega-projects
and mega-changes) is started 20 years before
peaking occurs, the economic consequences will be
dire. Dr. Robert L. Hirsch, Consultant for the
US Department of Energy, Congressional
Testimony A history of repeated and erroneous
predictions of oil peaking may have given false
assurance and convinced many policymakers that
such predictions can now be safely discounted.
However, recent peaking forecasts rest on a much
more robust geological foundation, and we cannot
ignore the fact that worldwide additions to
reserves have been falling short of consumption
for roughly two decades. The risks of delay are
dire. Prudent risk management calls for early
action. R.L. Hirsch, R.H. Bezdek, and R. M.
Wendling, Peaking Oil Production Sooner Rather
than Later? Issues in Science and Technology,
Spring 2005
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What If the Early Peakers are Right?

• Oil and gas prices quickly increase as supply
  cannot meet demand
• Spot shortages can occur quickly
• Confusion finger pointing, blaming
• Oil industry
• Allowing a shortage of oil rigs
• Manipulating oil supply
• OPEC, NOCs
• Government energy forecasters
• Quick emptying of SPR
• Increased dominance of Middle East
• Poorer countries priced out first, increasing
  instability and conflict

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Economic Impacts of an Early Peak

• Local impacts on
• Low income families
• Organizations/businesses that use a lot of fuel
  (e.g., airlines, trucking, tourism, public
  transit, etc.)
• Other cost increases (e.g., shipping, food,
  plastics, etc.)
• Reduced economic growth for net importers
• Increased wealth for oil exporting countries
• Environmental damage
• Global recession
• Global instability and threat of resource wars

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Operating under the Assumption of Peak Oil

• In conclusion, we are clearly entering a very
  different period for global energy markets and
  relations. We shall continue to face geopolitical
  risks and uncertainties and concerns around
  energy security will continue to rise. Petroleum
  will remain the most strategic and political
  energy commodity with natural gas running a close
  second. .The roles of leading actors in the
  global energy system will also change as the
  center of gravity for oil production shifts back
  towards the Middle East and Central Asia.Oil
  wars are certainly not out of the question.
• September 2005 report prepared for the U.S. Army
  Corps of Engineers entitled Energy Trends and
  Their Implications for U.S. Army Installations

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What if Early Peakers Are Wrong?

• We still have a problem, just more time to
  prepare and mitigate
• And by acting as if peak oil is soon
• Reduce dependence on foreign oil
• Be better prepared for other oil/fuel supply
  disruptions.
• Reduce carbon emissions.
• Improve sustainability of our transportation
  systems.
• Increase transportation options.
• Improve quality of life.

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So Many Unknowns

• When will global peak in oil production occur?
• Fast or slow decline rate?
• How quickly can/will Americans change their
  travel behavior?
• What policy changes will be implemented?
• Can alternative fuels or technology save us?
• Unknown unknowns?

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Preparing for Peak Oil

• Develop plan for reducing oil consumption.
• City of Portland, Oregon established goal to
  reduce oil and natural gas use by 50 percent in
  25 years.
• Policies to reduce oil dependency.
• Local/regional energy sources (e.g. cellulosic
  ethanol, electrified transportation, etc.)
• Local/regional policies and procedures for
  allocating fuel in an emergency (in coordination
  with State).

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Peak Oil and Transportation Demand Management
(TDM)

• Kathy Leotta
• PB
• 206-267-3810
• Leotta_at_pbworld.com
• Chris Hagelin
• Go Boulder
• 303-441-1832
• hagelinc_at_bouldercolorado.gov