The Hirsch Report -- Five Years Later

Below is a reprint of a post I made to another blog almost exactly 5 years ago. It is a summary of a presentation delivered by Robert Hirsch, at Duke University, in 2005. I am posting it again because Dr. Hirsch has just now published a book that lays out what has happened since and what he believes is now prudent. The book is titled "The Impending World Energy Mess." I will be commenting on this book in the near future.

Peak Oil: Our Gift to our Children
(originally posted on September 16, 2005)

It is with considerable reluctance that I publish this post. I risk being categorized as an “alarmist,” which often costs readership. But it would be negligent on my part not to post, so here goes.

I have been studying the “peak oil” controversy for approximately a year. As I progressed through the published work of authors whose credentials were beyond reproach, I became increasingly uneasy about our energy future. But until now, I continued to view peak oil as a controversy, not an inevitability. I have come to see that I can no longer “wait for things to play out.”

The tipping point for me was a presentation made at Duke University on Tuesday (9/13/05) by Dr. Robert Hirsch, a scientist who has served at very high levels in multiple energy fields—oil and gas, nuclear, renewables. There was no hesitation on Dr. Hirsch’s part regarding what we face. Unless we’re extremely lucky, and peak oil is 20 or more years down the pike, we are going to experience a crash. What Dr. Hirsch had discovered—in the course of completing a research contract for the Department of Energy—is that there are no feasible approaches to avoiding huge liquid fuel shortfalls unless a mitigation strategy is undertaken, as a crash program, at least 20 years prior to the oil production peak. And most reputable predictors are saying that the peak will come well before 20 years from now. And the fact is, we have NOT, to date, undertaken any of the mitigation strategies Hirsch discovered to be feasible, so we’re in all likelihood headed for huge trouble, worldwide. (Most of Hirsch’s audience consisted of college students; he remarked at the beginning of his lecture that his young audience was going to leave the presentation very unhappy. What an understatement.)

What Hirsch did is this. He carefully researched the technological options that could be brought on-line in the near future, limiting himself to those that could address the sheer magnitude of the problem of massive worldwide petroleum production shortfalls. The results of this “feasibility” study were, to put it charitably, sobering. Most of the feasible options fall within the domain of the energy companies themselves—primarily oil and gas companies—and little is available for the individual, society, or (non-dictatorial) governments to do. For example, the most feasible application of efficiency, at the level where it is likely to have any noticeable effect, is to automobiles and light trucks. The transition to diesels and hybrids—the best that Hirsch found we could do, given the time constraints—yields a per day savings of 2-3 million barrels (this is 15 years after initiating the conversion program), which is a mere 10% of what his total mitigation strategy can yield (25 million barrels per day, after 15 years). All of the other techniques have to do with enhancements to the production of existing oil or the production of oil substitutes. So if every one of us demanded of automakers that nothing but diesel and hybrid cars and light trucks be produced, and if the automakers responded via a crash program to produce only those, then we would still have made but a small contribution to the solution. And no other consumer-initiated approach was considered to be feasible (again, from the perspective of what it will take to truly meet the challenge). I should at least mention what the remaining feasible techniques are, in Hirsch’s view. The technique that can provide the most mitigation is the recovery and processing of "heavy oil" (heavy oil, oil sands, tar sands). The next most effective is the production of liquid fuels from coal. The third is enhanced oil recovery (the recovery of known quantities of oil that resist being produced by conventional methods). Fourth—and tied with vehicle efficiency for extent of contribution—is Gas-To-Liquid technology (for example, converting natural gas to a liquid fuel similar to gasoline). This is not the place to discuss these technologies in detail. Needless to say, the organizations most likely and most able to pursue these approaches are the existing energy companies. Please note that the overall mitigation strategy uses two general approaches: the reduction of demand through vehicle efficiency, and the increase in supply through additional oil recovery and the production of oil substitutes. And, to repeat, only one of these approaches is under anything close to direct citizen control—namely, expressed demand for diesels and hybrids.

Don’t get me wrong. This is no excuse for individuals to do nothing. But it does serve to indicate the limited extent to which we ordinary folks are in charge of our energy future. Later I will suggest one other direction that we in North Carolina can take to help mitigate the severity of what is likely to come. And of course we should be putting pressure on elected officials (and on the energy companies, to the extent that we can) to at least acknowledge the problem. With an open and vigorous public debate, other options might emerge and existing options might get implemented. But I must confess, I find it hard to be optimistic.

What’s new in Hirsch’s treatment, besides the feasibility analysis itself, is the attempt to plot the effects of a feasible mitigation strategy over time, under three scenarios. The first scenario assumes that we will conduct “business as usual” until the production peak occurs. At that point, we will initiate a crash program to implement the mitigation strategy described earlier. The second scenario assumes that, even though we cannot predict exactly when oil production will peak, we begin before the peak in fact occurs. The specific timing assumption for scenario two is 10 years in advance (again, we cannot plan to start ten years in advance; rather, we begin at some point and it just turns out that the peak occurred 10 years later). Scenario three assumes that we get started 20 years before the peak occurs.

Before looking at the results, it is important to understand some of the general assumptions that went into the scenarios. For all three, it is assumed that when the decision to implement is made, it truly is a crash program and massive resources are thrown at the implementation effort. Second, there is the assumption that “normal” petroleum demand increases will follow the historical trend: roughly 2% per year. Third, there is the critically important assumption that when the peak occurs, the downward slide will also be approximately 2% per year. This assumption reflects the actual numbers that are seen for the "US lower-48" oil production curve of the second half of the last century: when the peak occurred in the early ‘70s, the subsequent decline, when smoothed over time, averaged approximately 2% per year.

Now for the results. I will pretty much let the graphics do the talking. First, a bit of preparation. Hirsch represents the mitigation strategy results for each scenario with a wedge. The wedge-shape is used because he assumes that each component of the strategy will have to ramp up over time—the effort is so enormous that no piece of the strategy could be put into place all at once. Second, each mitigation wedge is really a combination of 5 smaller wedges, one for each of the techniques (efficiency, Heavy Oil, etc.). Third, each wedge represents a combination of decreased demand (efficiency) and increased supply (all of the others). Okay, what do we see?

The first graphic—a table—displays a sampling of peak oil predictions by well-known and/or well-respected estimators. This is important data, because it gives us a clue as to which scenario is likely to actually play out. The next graphic shows a sample mitigation wedge and its mini-wedge components. The next three graphs illustrate the results under the three scenarios.

Here's the table showing the predictions by various authorities of the oil production peak:

Half of the predictions yield dates that fall within the next 5 years; very few project the peak as being as much as 20 years out.

The following chart shows the relative contributions of each of the five feasible mitigation techniques:

Of the five feasible techniques, vehicle efficiency produces the smallest benefit (tied with Gas-To-Liquid).

The following charts illustrate three scenarios for peak oil mitigation. The first shows the supply shortfall if we wait until the peak occurs before we undertake a crash mitigation effort. The second shows the results of undertaking a crash program of mitigation 10 years prior to the peak. The third shows the results of undertaking a crash mitigation program 20 years prior to the peak. Only in the third case do we avoid the supply shortfall altogether.

Note the consequences: 20 years after the peak, even with mitigation efforts, a 30 million barrel-per-day shortfall is anticipated.

Mitigation has been undertaken 10 years before the peak occurs. The "delayed oil" arrow shows that the peak has effectively been delayed by roughly a decade. There is still a shortfall, but it occurs later and is smaller in size.

When mitigation is undertaken 20 years prior to the peak, there is no apparent shortfall.

This is chilling stuff. It gets worse. There are also alternative estimates of the rate of decline once the worldwide production peak is reached. These estimate range from 2% to 8%. Remember that Hirsch is assuming 2%. He admitted, in his presentation at Duke, that the estimate that worries him the most is the 8% number. Not only is it huge, but one of the estimators for that number is the company Schlumberger. Schlumberger is the leading oilfield services company in the world. This company supplies services everywhere, to all major producers. So this company knows as much (or more) about what is going on in the world of oil production as anyone does—and the company has been doing its thing for a very long time. Imagine what the three final graphics (above) would look like if the decline rate were 8%!

I asked Dr. Hirsch how you convince people to get started with mitigation efforts. He said that it takes probably three exposures to a presentation like his before anything concrete is even likely to be considered. The first time a person hears or sees this, the response is shock. The second exposure results in denial and "leaving the field" (as the psychologists like to say). The third exposure begins to penetrate in a more productive way, with people trying finally to get their heads around the enormity of it, trying to think concretely and realistically about what to do. Now imagine the likelihood that you will convince anyone you know to sit through a Hirsch presentation three times.