The past century can rightly be called the Age of Oil. World oil consumption grew from about 20 million metric tons/year in 1900 to nearly 4000 million tons/year in 2005—a 200 fold increase. The economic activity enabled by oil consumption also greatly increased both human wealth and the human population size over the last century.
But it is also clear that the Age of Oil is winding down. It is obvious, but often forgotten, that we must discover oil before we can produce, refine and use it. Worldwide, the rate of discovery of new oil reserves peaked in the 1960s. In the US our peak rate of oil discovery occurred in the early 1930s. In recent years the world has used about three barrels of oil for every barrel of new oil reserves discovered. Thus we are living largely on past oil discoveries. Reflecting this fact, world oil production has been flat since about 2005 in spite of high demand and record high oil prices. It appears we simply cannot produce oil any faster than we now are producing it. If we are not at “peak oil”, the evidence is that, at a minimum, we are at “plateau oil”. It will be very difficult, if not impossible, to increase oil production rates from now on. And since oil is a nonrenewable resource, eventually oil production must decline. We may have a long, flat peak, if we are very fortunate, but a peak nonetheless.
There is still a lot of oil in the world, and we will still be using a lot of oil decades from now. But it will be increasingly expensive both economically and environmentally to find, produce and refine that oil. And we are burning up oil much, much faster than nature is replacing it. Thus even if oil had no environmental and energy security drawbacks, as it certainly does, and even if high and volatile oil prices were not undermining the global economy, as they certainly are, we would still need to find alternatives to oil. The question is therefore: what are these alternatives to oil? What criteria should guide us as we choose between possible alternatives?
As a starting point for discussion, let us propose that any oil replacement satisfy the following metrics:
- Scale: 0.5 terawatts or roughly 10% of that currently provided by oil (400 million tons per year of oil equivalent).
- Cost of production: Roughly equal to oil at $100 per barrel so that it makes at least some economic sense under current conditions.
- Capital cost: Some oil replacements may require large new capital investments in the current fuel production, distribution and use infrastructure. It is likely that the world will be increasingly capital limited. Therefore each alternative should be rated on the total new capital (millions of dollars per megawatt) required to produce, distribute and use it.
- Energy return on energy invested (EROI): Society functions on the difference in the energy required to build and operate the energy production system and the energy produced by the system. This is often expressed as a ratio equal to the energy provided to society by the system divided by the energy required to build and operate the system or energy return on energy invested (EROI). A minimum EROI of 5:1 has been proposed for a sustainable system.
- Other sustainability issues: Essentially all new energy production systems have some sustainability issues connected with them. Participants in the discussion will be asked to describe how the sustainability issues connected with their particular system will be dealt with or mitigated, and how those efforts to mitigate will impact the four other criteria of scale, cost of production, new capital cost and EROI.
Do any existing technologies or fuels, or combinations of technologies or fuels, currently meet these criteria? If not, how might they? Are these the appropriate metrics?