Peak Oil, Energy, Economy, Population

Peak Oil, Domestic Energy, US Economy, World Population, Global Warming…

All of these things are linked. Energy consumption scales with gross national product. While it is true that some improvements in efficiency have resulted in greater gross national product per unit of energy, ultimately, energy limits our economic growth and the economic growth of the world.

If immigration is not counted, population growth in virtually all developed countries is negative. That is, populations in developed countries is declining with the exception of immigration from lesser developed regions.

In third world countries, social support for the aging is the family, the children. People want to have lots of children to take care of them in their old age. In developed countries, social support has been replaced by institutions that provide this function so the incentive to have lots of children for a secure old age is reduced or eliminated. In developed countries, many people opt not to have children at all.

The “kind” solution to world overpopulation is to improve the economic conditions in developing countries so that people have more than is needed for basic real time survival and can put resources into the types of institutions present in developed countries to address the needs of the elderly and disabled.

I am sure by now that everyone is familiar with the “peak oil” hypothesis, that once approximately half of the recoverable oil has been extracted, production will start to decline. And during that decline economic chaos will ensue.

In truth there is much oil that can be extracted. But there is a problem of refinery capacity and particularly the capacity to deal with the type of oil that remains in large quantities.

Crude oil can be “light” or “heavy” meaning it either has a mixture of relatively small hydrocarbon molecules, and consequently a low viscosity, or it has a mixture of heavier molecules which give it a higher viscosity. Light crude is easier to extract because of it’s low viscosity. Heavier crude may require heating to lower it’s viscosity for extraction, or injecting steam, or pressurization with say carbon dioxide to force it out. Real heavy hydrocarbons, tars, may require mining rather than drilling to extract.

Crude oil can also be “sweet” meaning it is low in sulfur and other contaminates, or “sour” meaning it is high in sulfur content.

Heavy crude is more expensive to refine because it requires cracking, a process that breaks longer molecules into shorter lighter molecules, to produce commonly useful products such as gasoline and diesel fuel. Cracking breaks heavier molecules with typically 20 carbon atoms into lighter hydrocarbons with 5-10 atoms, referred to as the naphtha fraction, that are used in gasoline. Cracking also requires the addition of hydrogen to the open end of the carbon chain. This is usually done by using steam in the cracking process so that the steam can donate hydrogen atoms. A certain percentage of the carbon is also oxidized into CO and CO2 in this process, and as a result of this and the need to provide heat for the process, a portion of the crudes energy potential is lost in this process.

Sulfur when burned produces sulfur dioxide which then reacts with water vapor in the atmosphere to produce sulfurous and sulfuric acid. This rains out turning lakes into an acid bath killing wildlife, trees, whatever it falls on. Consequently environmental regulations require a low sulfur content in fuel and the limits on sulfur content are being further reduced to negate environmental consequences.

Since refineries have to remove this sulfur from sour crude, this represents an additional processing step requiring energy.

So oil companies prefer to feed their refineries sweet light crude. They can get the most refined product at the lowest cost from sweet light crude. In addition, refineries have to be designed to handle heavy sour crude in order to be able to effectively process it.

Easy to get at sweet light crude is the oil that is running out, and most of what is left is in the middle east. But heavy sour crude is abundant elsewhere in the world. In the United States we have huge reserves in the form of oil shale and tar sands. Venezuela has huge reserves of heavy crude as does Canada.

The extraction technology has improved to the point where these heavy oils an be extracted economically however, adequate refinery capacity to refine these heavy, usually sour crudes, into finished products does not exist.

Oil companies are reluctant to invest in this capacity unless they are convinced that conventional sweet light crude will stay at high prices. If they invest heavily in such capacity and sweet light crude drops back to $30 a barrel, their investments will not be worth much as they will not be able to compete economically against products refined from sweet light cheap crude.

This combined with increasing demand from India and China where economic growth and the desire of people there to own cars and live the lifestyle enjoyed elsewhere in the developed world, is where our current pain at the pump largely originates.

The military adventurism and cowboy diplomacy of the current administration, the heightened level of conflict between Israel and the rest of the Arab world, civil unrest in Nigeria, also contribute to market jitters that inflate prices.

But even if all these issues went away tomorrow and the oil companies decided that sweet light crude was going to remain expensive and invested in the necessary refinery capacity, and the price of gasoline dropped out of the stratosphere, we’d still have all the environmental consequences related to the combustion of these fuels.

This ultimately will limit economic growth to levels that will not allow substantial portions of the world to rise out of poverty. And without poverty being addressed, we will continue to have population growth and every increasing stress on our ecosphere.

What we need are clean, sustainable, environmentally friendly energy sources that can be exploited without substantial limits or environmental impact. There may be no one energy source that can fulfill all of our needs but there are so many that collectively we have the potential to live in energy abundance.

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