Americans Gagging for Higher Fuel Economy Standards
Americans favor tougher fuel economy standards. This according to a poll of 1k voters performed by The [not entirely objective on the issue] Pew Campaign for Fuel Efficiency and the [equally industry antagonistic] National Environmental Trust. While failing to report the totals (86 percent in favor, 11 percent opposed, three percent couldn't be bothered), The Car Connection was happy to share the pollster's conclusion that the nationwide survey proves that U.S. voters consider their dependence on foreign oil to be the nation's top national security issue. So those polled want the feds to fix it by forcing the automakers to spend billions to engineer higher fuel mileage vehicles in fifteen years (that security-conscious consumers may or may not buy) instead of making any kind of personal sacrifice to cut oil consumption now. Heaven forbid they should have to give up their big pickup trucks, SUVs, motorhomes and powerboats or change their driving habits to help accomplish that goal.
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Yes, clearly a difference of opinion exists. * CERA conflates reserves with resources * CERA conflates productive capacity with productive flows * CERA misrepresents what King Hubbert modeled, and how subsequent modelers use linearization methods. * Approximately 50 countries have already peaked, more are peaking or about to peak (China, Mexico) * So far the discovery forecast that CERA uses from the USGS is 77% too optimistic (see here) http://www.theoildrum.com/story/2006/11/25/22361/503 * CERA's track record on individual countries is poor because its been too optimistic (see here) http://europe.theoildrum.com/story/2006/11/25/125137/18 * CERA needs to publish production intervals (i.e. a lower bound + a higher bound) not just production capacity. * The Hubbert high forecast was spot on for the lower-48 (1% error on the 2005 cumulative production after 40 years) * Unconventional sources are slow sources of oil (low flow rates) * The Super-giant fields with high flow rates are dying (Ghawar, Cantarell, Burgan etc.) * Reserve growth remains unproven at the world level and is based on observed reserve growth for the US (Attanasi et al.) which is likely biased due to the inclusion of censored statistics * CERA fails to acknowledge (or realize) that the long list of 'above ground factors' exist precisely because of increased geologic constraints on 'below ground resources' * The best technology in the world and higher prices did little to change the production profile of the United States, which peaked in production in 1970. Final point: Consider the motivation. How does CERA makes money for its clients? CERA is a profit-making business that sells its consulting services and specialized reports to a narrow, well-heeled audience. Why would it care about the pronouncements of a relatively small band of peak oil Internet vigilantes, some mostly retired oil company geologists, a few energy analysts and some concerned citizens who still constitute only the tiniest fraction of the public? The answer could lie in the accessibility, credibility and packaging of their message. http://resourceinsights.blogspot.com/2006_11_01_archive.html
March 11th, 2008 follow-up, as oil passes $108/barrel: 'Holding Daniel Yergin and CERA Accountable' This is a guest post by Glenn Morton, a geophysicist in the oil industry. For Kerr-McGee Oil and Gas Corp., Glenn served as Geophysical Mgr Gulf of Mexico, Geophysical Mgr for the North Sea, Dir. of Technology and as Exploration Director of China. Currently he is an independent consulting geophysicist, and he is known here at The Oil Drum affectionately as seismobob. Read it and weep. http://www.theoildrum.com/node/3487 Yergin and CERA have been wrong, and in the wrong direction, every year this century. Click for chart: http://home.entouch.net/dmd/cera.h2.jpg It would seem to me that CERA's numerous predictions of the fall of the price of oil have been false every time. The chart above speaks volumes about their inability to foresee even the near-term future. Maybe their view of the world energy situation is flawed, leading them to be overly optimistic about the future price of oil.[sarcastic mode on] nah that couldn't be! They are the CNBC oil analysts![sarcastic mode off] Like many in the peak oil community, I use Yergin and CERA as a contra-indicator for how I should invest. So far, it is working quite well.
Regarding CERA: Price and availability are related but different things. Daniel Yergin hasn't always been right about oil pricing, but he's been so far right more than wrong about oil availability. Part of the price of oil is the "insecurity" tax layered on the real costs, and on the futures pricing. Oil is affected by *perceived* availability more than actual availability. And unconventional oils aren't represented. Two-hundred dollar oil brings the US' vast shale oil deposits into play and with no change in tax structure leaves gasoline still cheaper than it is in Europe today. Phil
Extracting shale oil requires almost as much energy as is successfully extracted, as it has the energy density of baked potatoes. Thus, it will never be economically viable, same as it never has been. I can remember claims that it would be viable at $40/barrel. Didn't happen then, either.