Peaking Of World Oil Production: References

 

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Sustainable Society:  A society that balances the environment, other life forms, and human interactions over an indefinite time period.

 

 

 

 

 


 

Peaking Of World Oil Production:

Impacts, Mitigation, & Risk Management

Hirsch, Bezdek, and Wendling

References


Part I: Introduction
Part II: Peaking of World Oil Production
Part III: Why the Transition will be so Time Consuming
Part V: Learning from the Natural Gas Experience
Part VI: Mitigation Options and Issues
Part VII: A World Problem
Part VIII: Three Mitigation Scenarios
Part IX: Market Signals as Peaking is Approached
Appendices


Part I: Introduction

1 A more detailed list is given in the following chapter in Table II-2.

2 In this study we interchangeably refer to the peaking of world conventional oil production as “oil peaking” or simply as “peaking.”

Part II: Peaking of World Oil Production

3 Portions of this chapter are taken from Hirsch, R.L. "Six Major Factors in Energy Planning". U.S. Department of Energy. National Energy Technology Laboratory. March 2004.

4 U.S. Department of Energy, Energy Information Administration, International Energy Outlook – 2004, April 2004.

5 U.S. Department of Energy, Energy Information Administration, International Energy Outlook – 2004, April 2004.

6 Total oil in place is called the “resource.” However, only a part of the resource can be produced, because of geological complexities and economic limitations. That which is realistically recoverable is called “reserves,” which varies within limits depending on oil prices.

7 Aleklett, K. & Campbell, C.J. "The Peak and Decline of World Oil and Gas Production". Uppsala University, Sweden. ASPO web site. 2003.

8 U.S. Department of Energy, Energy Information Administration, International Energy Outlook – 2004, April 2004.

9 U.S. Department of Energy, Energy Information Administration, Long Term World Oil Supply, April 18, 2000.

10 The US Lower 48 experience occurred over a long period characterized at different times by production controls (Texas Railroad Commission), price and allocation controls (1970s), free market prices (since 1981), wild price swings, etc., as well as higher prices and advancing technology. Nevertheless, production peaked and moved into a relatively constant rate of decline.

11 Bakhtiari, A.M.S. "World Oil Production Capacity Model Suggests Output Peak by 2006-07." OGJ. April 26, 2004.

12 Simmons, M.R. ASPO Workshop. May 26, 2003.

13 Skrebowski, C. "Oil Field Mega Projects - 2004." Petroleum Review. January 2004.

14 Deffeyes, K.S. Hubbert’s Peak-The Impending World Oil Shortage. Princeton University Press. 2003.

15 Goodstein, D. Out of Gas – The End of the Age of Oil. W.W. Norton. 2004.

16 Campbell, C.J. "Industry Urged to Watch for Regular Oil Production Peaks, Depletion Signals." OGJ. July 14, 2003.

17. Drivers of the Energy Scene. World Energy Council. 2003.

18 Laherrère, J. Seminar Center of Energy Conversion. Zurich. May 7, 2003

19 DOE EIA. "Long Term World Oil Supply." April 18, 2000. See Appendix I for discussion.

20 Jackson, P. et al. "Triple Witching Hour for Oil Arrives Early in 2004 – But, As Yet, No Real Witches." CERA Alert. April 7, 2004.

21 Davis, G. "Meeting Future Energy Needs." The Bridge. National Academies Press. Summer 2003.

22 Lynch, M.C. "Petroleum Resources Pessimism Debunked in Hubbert Model and Hubbert Modelers’ Assessment." Oil and Gas Journal, July 14, 2003.

Part III: Why the Transition will be so Time Consuming

23 U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2004.

24 U.S. Department of Transportation, Federal Highway Administration, Highway Statistics, 2004.

25 U.S. Department of Energy, Energy Information Administration, Monthly Energy Review, 2004.

26 U.S. Department of Energy, Energy Information Administration, Detailed annual petroleum consumption accounts by fuel and sector at < www.eia.doe,gov.2004 >.

27 Because of the lack of national average "replacement value" estimates, current-cost net capital stock provides a suitable substitute for the estimates. Given the capital equipment depreciation schedule used, the total replacement value of the capital stock is projected to be 4.5 times higher than the current-cost net value.

28 U.S. Department of Energy, Energy Information Administration, Annual Energy Outlook - 2004, and Oak Ridge National Laboratory, Transportation Energy Data Book #23, 2003.

29 U.S. Department of Commerce, Bureau of Economic Analysis, Fixed Asset Tables, 1992-2002. The estimate of net stock includes an adjustment for depreciation, defined as the decline in value of the stock of assets due to wear and tear, obsolescence, accidental damage, and aging. For most types of assets, estimates of depreciation are based on a geometric decline in value.

30 Oak Ridge National Laboratory, Transportation Energy Data Book #23, 2003; and U.S. Department of Transportation, Bureau of Transportation Statistics, Active Air Carrier Fleet; and Management Information Services, Inc., 2004.

31 The largest remaining oil-consuming capital stock resides in the industrial sector. Oil consumption in the industrial sector is diverse, making it difficult to target specific capital stock and identify potential efficiency efforts or potential technology advancements. The largest oil consuming industries include the chemical, lumber and wood, paper products, and petroleum industry itself. Functional usage of oil in the industry includes heat, process heat, power, feedstock, and lubrication. Finally, the equipment spans hundreds of disparate types of in situ engines, turbines, and agricultural, construction, and mining machinery.

32 U.S. Department of Transportation, Bureau of Transportation Statistics, American Travel Survey Profile and Oak Ridge National Laboratory, Transportation Energy Data Book - 2003.

33 U.S. Department of Energy, Energy Information Administration. International Energy Annual, 2004. April 2004.

34 U.S. Department of Energy, Energy Information Administration, “Latest Oil Supply Disruption Information,“< eia.doe.gov >, 2004; U.S. Department of Energy, Energy Information Administration,. “World Oil Market and Oil Price Chronologies: 1970-2003,” March 2004; U.S. Department of Energy, Energy Information Administration, “Global Oil Supply Disruptions Since 1951”, 2001; U.S. Department of Energy, Energy Information Administration, Annual Energy Review, 2002;U.S. Department of Energy, Energy Information Administration, International Petroleum Monthly, April 2004.

35 This is verified by the extensive literature review conducted by Donald W. Jones and Paul N. Leiby, “The Macroeconomic Impacts of Oil Price Shocks: A Review of the Literature and Issues,” Oak Ridge National Laboratory, January 1996, and by Donald W. Jones, Paul N. Leiby, and Inja K Paik, “Oil Price Shocks and the Macroeconomy: What Has Been Learned Since 1996, The Energy Journal, 2003.

36 See, for example, Leonardo Maugeri, “Oil: Never Cry Wolf – Why the Petroleum Age is Far From Over, “ Science, Vol. 304, May 21, 2004, pp. 1114-1115; Michael C. Lynch, “Closed Coffin: Ending the Debate on ‘The End of Cheap Oil,’ A Commentary,” DRI/WEFA, September 2001; Michael C. Lynch “Farce This Time: Renewed Pessimism About Oil Supply, 2000; Bjorn Lomborg, “Running on Empty?” Guardian, August 16, 2001; Mark Mills, “Stop Worrying About Oil Prices,” 2001, < fossilfuels.org >; Jerry Taylor, “Markets Work Magic,” Cato Institute, January 2002; Rethinking Emergency Energy Policy, U.S. Congressional Budget Office, December 1994.

37 This is the consensus of virtually every rigorous analysis of the problem; see, for example, the International Monetary Fund study conducted by Benjamin Hunt, Peter Isard, and Douglas Saxton, “The Macroeconomic Effects of Oil Price Shocks,” National Institute Economic Review No. 179, January 2002.

38 “The Impact of Higher Oil Prices on the World Economy,” OECD Standing Group on Long-Term Cooperation, 2003.

39 See Lee, Ni, and Ratti, op. cit., and J.D. Hamilton and A.M. Herrera “Oil Shocks and Aggregate Macroeconomic Behavior: The Role of Monetary Policy,” Journal of Money, Credit and Banking, 2003.

40 U.S. Joint Economic Committee and Management Information Services, Inc., 2004.

41 This totals about $1.1 trillion in 2003 dollars and was equivalent to a once-and-for-all reduction in real GDP of about seven percent; however, part of that loss was likely attributable to structural and cyclical economic factors unrelated to the oil-price shock. See Faith Bird, “Analysis of the Impact of High Oil Price on the Global Economy,” International Energy Agency, 2003.

42 These losses totaled about $700 billion and $1.1 trillion, respectively in 2003 dollars. Losses of this magnitude are significant and represent the difference between vibrant, growing economies and economies in deep recession. There is considerable debate as to precisely how much of these losses was attributable to the oil price shocks, to fiscal and monetary policies, and to other factors.

43 See Bird, op. cit., and OECD Standing Group on Long-Term Cooperation, op. cit.

44 A $10/bbl. increase in oil prices, if sustained for a year, will reduce global GDP by 0.6 percent, ignoring the secondary effects on confidence, stock markets, and policy responses; see Bird, op. cit. A sustained increase of $10/bbl. would reduce economic growth by 0.5 percent in the industrialized countries and by 0.75 percent or more in the developing countries; see Ibid., OECD Standing Group on Long-Term Cooperation, op. cit., and International Monetary Fund, World Economic Outlook, September 2003. Larger oil price increases will have even more severe economic effects.

45 K.A. Mork, “Business Cycles and the Oil Market,” Energy Journal, special issue, 1994, pp. 15-38.

46 See Mark Hooker, “Are Oil Shocks Inflationary? Asymmetric and Nonlinear Specification Versus Changes In Regime,” Federal Reserve Board, December 1999.

47 Hillard Huntington, “Energy Disruptions, Interfirm Price Effects, and the Aggregate Economy,” Energy Modeling Forum, Stanford University, September 2002; S.J. Davis, and J. Haltiwanger,  “Sectoral Job Creation and Destruction Response to Oil Price Changes,” Journal of Monetary Economics, Vol. 48, 2001, pp. 465-512.

48 “Demand destruction” has often been identified as a solution, since oil price increases resulting from a disruption will reduce demand and this will moderate further price increases. However, demand is reduced because the economy is devastated and large numbers of jobs are lost. Demand destruction – a polite word for economic and job losses – is the problem, not the solution. See the discussion in Roger Bezdek and Robert Wendling, “The Case Against Gas Dependence,” Public Utilities Fortnightly, Vol. 142, No. 4, April 2004, pp. 43-47.

49 Joint Economic Committee of the U.S. Congress, “10 Facts About Oil Prices,” March 2003; Mark Hooker, “Oil and the Macroeconomy Revisited,” Federal Reserve Board, August 1999.

50 Nevertheless, during disruptions, public actions may be required to address societal risks. This creates a dilemma: In the event of a severe shortfall of long duration, government intervention of some sort may be required, and allocation plans to moderate the effects of this shortfall will likely be advocated. However, given the experience of the 1970s, many of the policies enacted in a crisis atmosphere will be, at best, sub-optimal. For example, in 1980, the Federal government developed a Congressionally-mandated stand-by U.S. gasoline rationing plan which could, in some form, be implemented; see Standby Gasoline Rationing Plan, U.S. Department of Energy, Washington, D.C., June 1980.

Part V: Learning from the Natural Gas Experience

51 National Petroleum Council. Meeting the Challenges of the Nation's Growing Natural Gas Demand. December 1999.

52 Esser, R. et al. Natural Gas Productive Capacity Outlook in North America - How Fast Can It Grow? Cambridge Energy Research Associates, Inc. 2001.

53 U.S. Department of Energy, Energy Information Administration, Annual Energy Outlook 2000. December 1999.

54 CERA Advisory Services. The Worst is Yet to Come: Diverging Fundamentals Challenge the North American Gas Market. Cambridge Energy Research Associates, Inc. Spring 2004.

55 Industry Trends (quoting Raymond James & Associates). OGJ. June 7, 2004.

56 Adkins, J.M. et al. "Energy Industry Brief". Raymond James & Associates. May 17, 2004.

57 "Lehman Says US 1Q Gas Production Fell By 5.3%". Dow Jones. May 12, 2004.

58 National Petroleum Council. Balancing Natural Gas Policy – Fueling the Demands of a Growing Economy: Volume I – Summary of Findings and Recommendations. September 25, 2003.

59  Reuters. "Alberta Gas Output Falling Despite Record Drilling". June 6, 2004.

60 Natural Gas Markets and EIA's Information Program March 2000.

61 U.S. Department of Energy, Energy Information Administration, Natural Gas Annual 2002.

62 U.S. Department of Energy, Energy Information Administration, "Natural Gas Navigator." Last Updated 5/6/04.

63 CERA Advisory Services. "The Worst is Yet to Come: Diverging Fundamentals Challenge the North American Gas Market". Cambridge Energy Research Associates, Inc. Spring 2004.

64 The Alaska natural gas pipeline is at least 10 years from operation, maybe longer.

65 Flalka, J.J. & Gold, R. "Fears of Terrorism Crush Plans For Liquefied-Gas Terminals." The Wall Street Journal. May 14, 2004.

66 Bender, B. "DistriGas Contests Hazard Study Findings." Boston Globe. June 2, 2004.

Part VI: Mitigation Options and Issues

67 Harvan, R. "Diesel Use Surging". World Refining. June 2004.

68 Consumer Reports. August 2004. Page 49.

69 National Research Council. The Hydrogen Economy: Opportunities, Costs, Barriers, and R & D Needs. National Academy Press. 2004.

70 Kerwin, K. "Chrysler Puts Some Muscle on the Street". Business Week. June 7, 2004.

71 Press release. Eaton Corp., March 30, 2004.

72 Press release. National Renewable Energy Technology Laboratory, February 8, 2002.

73 Homes, S. "A Silver Lining for Boeing". Business Week. May 24, 2004.

74 Williams, B. "Progress in IOR technology, economics deemed critical to staving off world's oil production peak". OGJ. August 4, 2003.

75 Williams, B. "Progress in IOR technology, economics deemed critical to staving off world's oil production peak". OGJ. August 4, 2003; National Research Council. Fuels to Drive Our Future. National Academy Press. 1990.; "EOR Continues to Unlock Oil Resources". OGJ. April 12, 2004.

76 Economists will argue that this amount will increase with higher world oil prices, which is almost certainly correct. However, without careful analysis, estimation of the increased reserves would be strictly speculation.

77 These numbers are subject to revision upwards or downwards depending on future geological findings, advancing technology, or higher oil prices. Williams, B. "Heavy Hydrocarbons Playing Key Role in Peak Oil Debate, Future Supply". OGJ. July 28, 2003.

78 Gray, D. "Oil Sands Conference Report". Mitretek. May 24, 2004.

79 "Oil Sands Technology Roadmap". Alberta Chamber of Resources. January 2004.

80 Gray, D. "Oil Sands Conference Report". Mitretek. May 24, 2004.

81 Underground steam recovery requires about 3 bbls of water per barrel of recovered bitumen. Mining operations need 4-6 bbls of water per bbl of bitumen. Ref.: Gray, D. Oil Sands Conference Report. Mitretek. May 24, 2004.

82 "Oil Sands Technology Roadmap". Alberta Chamber of Resources. January 2004.

83 Stott, J. "CERI: Alberta Oil Sands Industry Outlook ‘Very Robust.’" OGJ. March 22, 2004.

84 Jaremko, G. "Green forces rally to divert oil sands' use of Arctic gas. Gas use by 2015 could surpass Mackenzie capacity". The Edmonton Journal. April 15, 2004.

85 U.S. Department of Energy, Energy Information Administration, "Country Analysis Briefs – Venezuela," June 2004.

86 Gray, D. "Oil Sands Conference Report". Mitretek. May 24, 2004.

87 Sen, C.T. "World’s LNG Industry Surges, Pushed By Confluence of Factors". June 14, 2004.

88 Higgins,T. "Gas-To-Liquids: An Emerging Driver for Diesel Markets?" World Refining. April 2004.

89 Kruger, P du P. "Startup Experience at Sasol’s Two and Three". Sasol. 1983.

90 National Research Council. Fuels to Drive Our Future. National Academies Press. 1990.

91 Gray, D. et al. "Coproduction of Ultra Clean Transportation Fuels, Hydrogen, and Electric Power from Coal". Mitretek Systems Technical Report MTR 2001-43, July 2001.

92 Johnson, H. et al. "Strategic Significance of America’s Oil Shale Resource". DOE. March 2004.

93 O’Conner, T. "Mahogany Research Project: Technology to Secure Our Future". Presentation at the DOE Shale Peer Review. February 19-20, 2004.

94 Smith, S.J. et al. "Near-Term US Biomass Potential." PNWD-3285. Battelle Memorial Institute. January 2004.

95 American Association of Railroads. Railroad Facts. 2002.

96 "DOE Hydrogen Posture Plan". < www.eere.energy.gov/hydrogenandfuelcells >. March 10, 2004.

97 National Research Council. The Hydrogen Economy: Opportunities, Costs, Barriers and R & D Needs. National Academies Press. 2004.

98 Ibid.

99 There has been extensive discussion of these problems in the literature; see, for example, Management Information Services, Inc., Summary of the Implications of the Environmental Justice Movement for EPRI and its Members; prepared for the Electric Power Research Institute, 1997; K.A Kilmer, G. Anandalingam, and J. Huber, “The Efficiency of Political Mechanisms for Siting Nuisance Facilities: Are Opponents More Likely to Participate Than Supporters?” Journal of Real Estate Finance and Economics, vol. 22, 2001; Sheila Foster, “Justice from the Ground Up: Distributive Inequalities, Grassroots Resistance, and the Transformative Politics of the Environmental Justice Movement,” California Law Review, vol. 86, no. 4 (1998), pp. 775-841; D. Minehard and Z. Neeman, “Effective Siting of Waste Treatment Facilities,” Journal of Environmental Economics and Management, vol. 43, 2002, pp. 303-324; Joanne Linnerooth-Bayer, “Fair Strategies for Siting Hazardous Waste Facilities,” International Institute for Applied Systems Analysis, Laxenburg, Austria, May 1999; Don Markley, “Its not NIMBY Anymore, its BANANA,” Broadcast Engineering, March 1, 2002; S. Tierney and P. Hibbard, “Siting Power Plants in the New Electric Industry Structure: Lessons From California," The Electric Journal, 2000, pp. 35-49; Dan Sandoval, “The NIMBY Challenge,” Recycling Today, April 14, 2003; Philip Sittleburg, “NIMBY Mindset Looks for Zoning Loopholes,” Fire Chief, February 1, 2002.

100 Siting the Brightwater Treatment Facilities: Site Selection and Screening Activities, King County, March 2001.

101 U.S. Department of Energy, Environmental Siting Guide, Office of Energy Efficiency and Renewable Energy, 2004.

102 On the other hand, even in the midst of the energy crisis, the Alaska oil pipeline was approved by only one vote in the U.S. Senate and, currently, EIA anticipates that an Alaska gas pipeline will not be completed prior to 2020 – see U.S. Energy Information Administration, 2004 Annual Energy Outlook, February, 2004.

103 U.S. Department of Energy, Energy Information Administration, Monthly Energy Review, 2004.

Part VII: A World Problem

104 U.S. Department of Energy, Energy Information Administration. "Table 1.2 World Petroleum Consumption, 1980-2002" database and "Table G.2 World Production of Crude Oil, NGPL, Other Liquids, and Refinery Processing Gain 1980-2002" database, 2004.

105 Ibid

Part VIII: Three Mitigation Scenarios

106 Pacala, S., Socolow, R. "Stabilization Wedges: Solving the Climate Problem for the Next 50 Years with Current Technologies.” Science. August 13, 2004.

107 These potential savings are documented in National Research Council, National Academy of Sciences, Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards, Washington, D.C.: National Academy Press, 2002; Management Information Services, Inc., and 20/20 Vision, Fuel Standards and Jobs: Economic, Employment, Energy, and Environmental Impacts of Increased CAFE Standards Through 2020, report prepared for the Energy Foundation, San Francisco, California, July 2002; David L. Greene and John DeCicco, Engineering-Economic Analysis of Automotive Fuel Economy Potential in the United States, paper presented at the IEA International Workshop on Technologies to Reduce Greenhouse Gas Emissions, Washington, D.C., May 1999; David Friedman, et al, Drilling in Detroit: Tapping Automaker Ingenuity to Build Safe and Efficient Automobiles, Union of Concerned Scientists, UCS Publications, Cambridge, MA, June 2001; Roland Hwang, Bryanna Millis, and Theo Spencer, Clean Getaway: Toward Safe and Efficient Vehicles, Natural Resources Defense Council: New York, July 2001; Brent D. Yacobucci, Marc Ross, Technical Options for Improving the Fuel Economy of U.S. Cars and Light Trucks by 2010-2015, American Council for an Energy Efficient Economy, July 2001; Robert L Bamberger, Automobile and Light Truck Fuel Economy: Is CAFE Up to Standards? Washington, D.C.: Congressional Research Service, September 29, 2001; Energy and Environmental Analysis, Inc. Technology and Cost of Future Fuel Economy Improvements for Light-Duty Vehicles, prepared for the National Research Council, 2001.

108 The choice of a minimum is subjective. A minimum of 50 percent seems reasonable, but a higher rate is clearly more desirable.

109 While diesel engines offer significant improvements in fuel economy over gasoline engines, their benefits are notably less than hybrids. For simplicity, we neglect the broader use of diesels in this study, which is not meant to imply that they might indeed make an important contribution in the LDV markets.

110 In their recently published hydrogen study, the National Research Council has shown that hydrogen from biomass is roughly three times as expensive as coal-based hydrogen. This relationship holds roughly for liquids production, another basis for not considering biomass fuels as acceptable under our criteria. See National Research Council, National Academy of Sciences, The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs, Washington, D.C.: National Academy Press, 2004

111 "Hydrocarbon Resources: Future Supply and Demand." World Energy Council - 18 th Congress, Buenos Aires, October 2001.

112 Compounding starts at 67.3 MM bpd at –20 years, rises to 100 MM bpd at year 0, and drops to 66.8 MM bpd at +20 years.

113 See for instance Al-Husseini, S.I. , Retired Exec. V.P., Saudi Aramco. A Producer’s Perspective on the Oil Industry. Oil and Money Conference. London. October 26, 2004; Hakes, J. Long Term World Oil Supply. EIA. April 18, 2000; and ExxonMobil. A Report on Energy Trends, Greenhouse Emissions and Alternate Energy. February 2004.

Part IX: Market Signals as Peaking is Approached

114 Over the past 20 years, oil prices have been extremely volatile. Between 1982 and 2002, the standard deviation in monthly oil prices was 29.5 percent of its mean. The only other major commodity whose price exhibited similar volatility was coffee – 27.8 percent of its mean. See Andre Plourde and G.C. Watkins, “Crude Oil Prices Between 1985 and 1994: How Volatile in Relation to Other Commodities?” Resource and Energy Economics, Vol. 20, 1998, pp. 245-262. In general, Plourde and Watkins found that oil prices fluctuated more or at least as much as the most volatile of commodity prices; see the discussion in Hillard Huntington, “Energy Disruptions, Interfirm Price Effects, and the Aggregate Economy,” Stanford Energy Modeling Forum, September 2002.

115 International Energy Agency, “IEA Expresses Concern About High Oil Prices as it Celebrates its 30th Anniversary,Istanbul, April 2004; International Monetary Fund, World Economic Outlook Report, September 2003.

116 Walter C. Labys, Globalization, Oil Price Volatility, and the U.S. Economy, 2001.

117 Vincente Ramirez, “Oil Crises Delay – a World Oil Price Forecast,” REXplore Zachasumsc, Switzerland, July 1999.

118 John Schoen, “Oil Prices Include a Growing Risk Premium," Business with MSNBC, Oil and Energy News, May 12, 2004.

119 Jean-Marie Bourdaire, “Energy Supply Conditions and Oil Price Regime,” presented at the Association for the Study of Peak Oil, Paris, May 2003.

Appendices

120 DOE EIA. "Long Term World Oil Supply." April 18, 2000.

121 Deffeyes, K.S. Hubbert’s Peak-The Impending World Oil Shortage. Princeton University Press. 2003. p. 134.

122 This consensus emerged by the 1990s; see, for example, K. Lee, S. Ni, and R. Ratti, “Oil Shocks and the Macroeconomy: The Role of Price Variability," Energy Journal, Vol. 16, no. 4, 1995.

123 Once again, this experience may preclude such an option in the future, even though it may be called for. For example, by the 1990s, CBO had concluded that the threat posed by oil disruptions had declined; see U.S. Congressional Budget Office, op. cit.

124 Estimates range from $2 trillion to more than $7 trillion (2004 dollars) —exclusive of military or political costs. See U.S. General Accounting Office, Energy Security: Evaluating U.S. Vulnerability To Oil Supply Disruptions and Options for Mitigating Their Effects, GAO/RCED-97-6, 1997; David Greene and Nataliya Tishchishyna, Cost of Oil Dependence: A 2000 Update, Oak Ridge National Laboratory, May 2000; National Defense Council Foundation, The Hidden Cost of Imported Oil, October 2003.

125 See the discussion in Roger Bezdek and John Taylor, “Allocating Petroleum Products During Oil Supply Disruptions,” Science, June 19, 1981, Vol. 212, pp. 1357-1363.

126 DOE, EIA Monthly Energy Review and Management Information Services, Inc., 2004.

127 In 1981, consumers spent nearly six percent of their incomes on gasoline, but in 2003 they spent only three percent of their incomes on gasoline; in 1985, gasoline and oil represented 20 percent of the cost of owning and operating a vehicle, but by 2002 represented only 10 percent of the cost.

128 Between 1982 and 2002, the standard deviation in monthly oil prices was 29.5 percent of its mean, and the only other major commodity whose price exhibited similar volatility was coffee – 27.8 percent of its mean. See Andre Plourde and G.C. Watkins, “Crude Oil Prices Between 1985 and 1994: How Volatile in Relation to Other Commodities?” Resource and Energy Economics, Vol. 20, 1998, pp. 245-262. In general, Plourde and Watkins found that oil prices fluctuated more or at least much as the most volatile of commodity prices; see the discussion in Hillard Huntington, “Energy Disruptions, Interfirm Price Effects, and the Aggregate Economy,” Stanford Energy Modeling Forum, September 2002.

129 DOE EIA, International Energy Outlook, 2004.

130 See the discussion in Roger H. Bezdek and Robert M. Wendling, "A Half-Century of Long-Range Energy Forecasts; Errors Made, Lessons Learned, and Implications for Forecasting,"

131 Source: U.S. Department of Energy, Energy Information Administration, 2004.

132 Management Information Services, Inc., and 20/20 Vision, Fuel Standards and Jobs: Economic, Employment, Energy, and Environmental Impacts of Increased CAFE Standards Through 2020, report prepared for the Energy Foundation, San Francisco, California, July 2002.

133 Ibid.

134 National Research Council, National Academy of Sciences, Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards, Washington, D.C.: National Academy Press, 2002.

135 Ibid. Management Information Services, Inc., and 20/20 Vision, op. cit.; David L. Greene and John DeCicco, Engineering-Economic Analysis of Automotive Fuel Economy Potential in the United States, paper presented at the IEA International Workshop on Technologies to Reduce Greenhouse Gas Emissions, Washington, D.C., May 1999; David Friedman, et al, Drilling in Detroit: Tapping Automaker Ingenuity to Build Safe and Efficient Automobiles, Union of Concerned Scientists, UCS Publications, Cambridge, MA, June 2001; Roland Hwang, Bryanna Millis, and Theo Spencer, Clean Getaway: Toward Safe and Efficient Vehicles, Natural Resources Defense Council: New York, July 2001; Brent D. Yacobucci, Sport Utility Vehicles, Mini-Vans and Light Trucks: An Overview of Fuel Economy and Emissions Standards, Congressional Research Service, U.S. Congress: Washington, D.C., (RS20298), January 16, 2001; Robert L Bamberger, Automobile and Light Truck Fuel Economy: Is CAFE Up to Standards? Washington, D.C.: Congressional Research Service, September 29, 2001; Energy and Environmental Analysis, Inc. Technology and Cost of Future Fuel Economy Improvements for Light-Duty Vehicles, prepared for the National Research Council, 2001.

136 See Management Information Services, Inc., and 20/20 Vision, op. cit.; Roger H. Bezdek and Robert M. Wendling, “The Economic and Employment Effects of Increasing CAFE Standards.” Energy Policy, 2004.

137 U.S. Energy Information Administration, World Petroleum Consumption by Fuel database, 2003, and Oak Ridge National Laboratory, Transportation Energy Data Book, 2003. Japan has 10% of total vehicle registrations, Germany 9 percent, France 5 percent, and UK 5 percent, totaling (including the U.S.) 54 percent%. However, the U.S. has a higher miles per vehicle rate than any other developed country – it is less densely populated, has relatively inexpensive gasoline, and U.S. drivers do a large amount of discretionary driving.

138 Kruger, P du P. "Startup Experience at Sasol’s Two and Three." Sasol. 1983.

139 Collings, J. "Mind Over Matter – The Sasol Story: A Half-Century of Technological Innovation," Sasol. 2002.

140 DOE EIA. International Energy Outlook. 2004.

141 "Sasol Taps Into China’s Demand for Oil." Financial Times. July 8, 2004.

142 Williams, B. "Heavy Hydrocarbons Playing Key Role in Peak Oil Debate, Future Supply." OGJ. July 28, 2003; DOE EIA. Early Release AEO 2004. December 16, 2003.

143 "Drivers of the Energy Scene." World Energy Council. December 2003.

144 Even under a crash program, 5 percent production increase in 10 years does not seem achievable, but roughly half that level might be possible. Our reasoning is strongly influenced by the need for relatively pure CO2, which is difficult to obtain in most places around the world. This is especially true in the Middle East, where large sources of relatively pure CO2 are somewhat rare at this time.

145 McCaughey, J. "Is Gas OPEC in the Cards?" Electricity Daily. June 29, 2004.

146 US DOE ONPOSR. Strategic Significance of America’s Oil Shale, Vols I and II. March 2004.

147 Rocky Mountain News, October 18, 2004, “Shale’s New Hope: Shell Tests Technology to Cook Oil out of Rocks Underground,” p. 1B.

148 NREL 2002.

149 USDA 2002.


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