It is clear that the Age of Oil is winding down. Worldwide, the rate of discovery of new oil reserves peaked in the 1960s and 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. 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. Thus we need to identify and develop realistic petroleum alternatives.
The question is therefore: What are possible alternatives to oil? What criteria should guide us as we choose between possible alternatives? I suggest the following tentative set of metrics for choosing between our various alternatives to oil and I welcome discussion around this topic.
Metric #1: Scale Humankind currently uses about 450 exajoules (EJ) of energy per year and will require even more energy in the future. Petroleum provides about one third of global primary energy. As a starting point for discussion, let us require that any petroleum alternative be capable of providing roughly 10% of that currently provided by petroleum, or 15 EJ/year, if we are to take it seriously.
Metric #2: Cost of the fuel It seems highly unlikely that future transportation fuels will ever be as inexpensive as the fuels provided by oil at $20 per barrel. However, we cannot pay an unlimited amount for transportation fuels either. As a starting point for discussion, let us require that any oil replacement at technological maturity be capable of providing fuels at a cost equivalent to oil at about $100 per barrel, roughly the current level.
Metric #3: Capital cost of the fuel production system Many decades and trillions of dollars will be required to make the transition to petroleum alternatives. Thus lower capital cost systems providing the same energy output are obviously very highly favored as they will require less current wealth (foregone current consumption) invested to ensure future access to energy. Systems that use or leverage existing capital assets for raw material production, fuel processing and distribution are thus highly advantaged.
Metric #4: Energy Return on Energy Invested Society functions on the surplus energy (called “net energy”) provided by its fuel system that is in excess of the energy required to build, maintain and operate the fuel system. This simple physical fact is often expressed as a ratio called the “energy return on energy invested” or EROI. EROI is equal to the energy provided to society by the fuel production system divided by the energy input from society required to build and operate the fuel production system. I suggest a minimum EROI ought to be greater than 6:1, that is, 5 GJ of energy “surplus” to society for every 1 GJ used in the fuel production and distribution system.
Metric #5: Sustainability There seem to be four primary aspects of sustainability with regard to petroleum alternatives: economic viability (discussed above), environmental impacts, social impacts and renewability. I believe renewability is the key sustainability criterion. The next energy systems we put in place should, in principle, last indefinitely, not just the century or two that oil was able to serve humankind’s needs. Renewability is relatively easy to gauge whereas environmental impacts are less easy to gauge – such as greenhouse gas (GHG) emissions, water use and water quality effects, biodiversity, land use – and will probably differ for different fuels, different stakeholders and different situations.