Month: June 2013

Rebuking the theory of peak oil

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There is quite a bit of fuss about peak oil. Are we running out? Are end times near?

Pulitzer Prize winner, Daniel Yergin has a piece on peak oil over at the Wall Street Journal. He explores the origin of the theory and gently explains that Hubbert, the theory’s proponent, was mistaken.

“Hubbert was imaginative and innovative,” recalled Peter Rose, who was Hubbert’s boss at the U.S. Geological Survey. But he had “no concept of technological change, economics or how new resource plays evolve. It was a very static view of the world.” Hubbert also assumed that there could be an accurate estimate of ultimately recoverable resources, when in fact it is a constantly moving target.”

It may very well be that Rose could have said, “… energy is a constantly moving target.”

Over at Exxon’s Perspectives blog, the writers have a done excellent job at explaining energy mixes and the changing shape of consumption.  This isn’t a shift in language, it’s a shift in a broader consumption of different forms of energy, oil included.

Bringing Electricity, Bringing Wealth

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What does energy have to do with poverty? Or rather, what does energy have to do with growth?

Global energy is projected to exponentially grow by 2035. While the economies of developing countries are continuing to grow, infrastructure has not kept pace at the same rate, especially in China and India. Instead infrastructure, such as electricity, is concentrated in urban areas and cities. Globally more people have access to electricity, yet recent statistics show almost 1.3 billion people still do not.

For investors, this presents a business opportunity.
Notes a Goldman Sachs report, “Power is the life blood of any modern economy. An erratic or inaccessible power supply is often a key constraining factor to the sustainable growth prospects of many early stage emerging economies, given its central role in increasing production.”

US Energy independence … by accident

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Energy independence by accident? That’s an idea being championed by P. Verlerger. He suggests that by 2023, the US will be energy independent … by accident.

He argues that a combination of factors are leading up to this event, such as new financial service products, deregulation of natural gas and independents like Devon Energy who have invested in horizontal drilling techniques.

Projected Global Energy Use (Current- 2035)

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National Geographic has a great piece on the world’s energy mix, from current use to projected use in 2035. “Energy mix” is a word ever in vogue, but rarely explained well. This piece visually illustrates the term.
The map is a fun, clever and interactive way to learn about upcoming global energy trends. Most fascinating are China and Latin America’s energy mixes, which are heavily reliant on nuclear and renewable energy to meet their electricity demands.
Coal energy will continue to support many developing countries and while “clean coal” is available, it is extremely expensive, and thus not a viable alternative except for a few countries. Which brings us to another idea worth exploring: exponential coal consumption, in countries like India, poses a challenge to meet growing environmental standards.