Texas Observer, Published February 23, 2012
Tad Patzek is a blue-eyed Polish-American who has what NPR termed a “certain charming Slavic gloom.” Though Patzek considers himself a steely realist, not a pessimist, a conversation with him will not leave you feeling particularly sunny. Patzek, the chair of the Department of Petroleum and Geosystems Engineering at the University of Texas, doesn’t do Pollyanna when it comes to the global energy dilemma.
Patzek is firmly in the Peak Oil camp. He’s the incoming chair of the Association for the Study of Peak Oil & Gas, a group that describes itself as a “non-profit, non-partisan research and public education initiative to address peak oil and energy challenges for the United States.” There are cranks in Peak Oil circles: survivalists, secular End Times prognosticators, and tin-foil conspiracy theorists. Agree or disagree with Patzek, he is not one of them.
The professor is a numbers guy with impeccable bona fides in the world of Big Oil and academe.
Our Q&A, edited for brevity and clarity, follows:
Texas Observer: You believe oil production is peaking now, coal may have peaked last year, and natural gas’s peak could come in 20-50 years? How do we know this and why should we care about a peak in production?
Tad Patzek: Conventional petroleum peaked or started peaking in 2005. However, strides were made in ultra-deep offshore, Canadian tar sands and natural gas liquids which then partially offset stagnant conventional petroleum but all of the above is kind of oscillating on the plateau right now so that’s what I mean by current oil peak. The coal, I went on a limb and risked the prediction—these predictions are risky because if you’re off by one year everybody will say you’re stupid—but we are at about coal peak rate plus or minus maybe a couple of years here or there.
Having said that, why is this important? Well, one of the biggest misperceptions that we have in society at large and particularly in United States is the confusion between energy and energy per unit of time, which is power.
Our society is not about energy. Our society is about power. Power is the blood of a modern complex society, and with less power society can simply do fewer things. It’s not the energy, it’s not how much work we can do in an unspecified amount of time, but it is the amount of work we can do in the shortest possible time that matters. From that point of view, the peak of production rate, or production of power, from two out of three major sources of power for our society, matter a lot – in fact, matter much more than people imagine.
TO: The conventional wisdom is, It’s probably inarguable that conventional oil production has peaked, but technology and the economics of it will lead us to find untapped oil – whether it’s tar sands in Canada or offshore drilling in ultra-deep water, and that will suffice to keep up with the global growth in demand for oil.
TP: And it won’t. The explanation is actually very, very simple: When we always first produce easy-to-access, cheap-to-produce, concentrated resources — as these are running out or become very difficult to access, we then go to more difficult resources.
These things can generate a lot of power at an exceedingly high cost with exceedingly complex and expensive facilities. So human ability to multiply Macondo wells [the deepwater Gulf prospect where the BP oil spill occurred] wherever we wish is actually very limited. But also the number of reservoirs into which they tap is very limited, so even though ‘yes we shall do it’ and ‘yes we shall go into the Arctic’ into every nook and cranny and every tropical jungle and tropical sea we can find to produce oil, the fact of the matter is we are going to end up going to colder, wetter, deeper, less hospitable places and production gets to be more expensive every day. So that’s the offshore saga.
In terms of unconventional oil, these wells are very expensive, and you need thousands upon thousands of them and they actually produce very little oil in terms of barrels per day. They have a very fast decline rate. Yes, we will be producing them and we will produce them better and more efficiently, more environmentally safely, however all of the unconventional wells will not replace one super-giant field in Saudi Arabia such as Ghawar.
TO: Once the peak is reached, is it irreversible?
TP: In absolute terms, yes. Except with natural gas and in the United States we actually did reverse it — it’s a very unique situation, where all the offshore gas and unconventional gas created the second Hubbert’s peak, which is equal in size or higher than the original Hubbert’s peak that peaked together with oil around 1971. So the U.S. has demonstrated that with lots of technology and trial and error and risk-taking, with some resources you can actually create another comparable Hubbert’s peak, but that’s a unique experience; no one has replicated it yet.
TO: Forecasting anything is a really difficult business. It depends on your inputs and your models. How can you be so confident that you’re right?
TP: I’m not. However, I have been in this business of predicting the future on technical ground for 30 years, and I’ve developed a pretty good instinct for what is plausible and what is not. I also have looked at Hubbert’s peaks and have seen that in fact they are inevitable, because they are simply the outcome of summing lots of uncorrelated random variables with arbitrary but finite variances, and if you sum them up the outcome is always a normal curve which is approximated by Hubbert’s peak.
Having said that, technology—the word that is most beloved by Americans—brings us new solutions and in fact I do work with the biggest, most technologically-driven industry on this planet, which is the oil and gas industry, and I am at the forefront of that technology. So I have to laugh sometimes at the blind faith of other people in technology, because I do it every day and I know that it can be very useful but it’s not a miracle.
If you look at the history of production of crude oil in the U.S., we had one major Hubbert’s peak in 1971 and then we had about four or five other peaks, including the current one from unconventional resources, which are smaller but occurred later. And there was no way we could predict those smaller Hubbert’s peaks in 1970 or in 1956, so therefore there is always an element of surprise and the actual rate of decline is always lower than whatever your current analysis predicts. So there is a sort of silver lining in this dark cloud I’m painting in front of you.
TO: So the day of reckoning can be delayed and made less painful, but it comes regardless?
TP: It has to come from the very simple fact that the earth is a finite planet—the last time I checked it’s spherical and we know it’s size, so therefore it can’t have infinite resources—so therefore that day of reckoning in terms of oil I’m very sure that it has come.
But the situation is far more complicated than that because it really doesn’t matter what the production rate is globally. What really matters is the excess production rate of the countries that export oil, right? If you buy oil somebody else has to sell it to you. Therefore, to the extent that the country that is selling you oil will be using more oil internally—because its population is growing and because it does more expensive and complicated things—that country will have less oil to sell to you. And that is also happening at the same time that the production rate of oil is either steady or declining, depending on what country you’re looking at.
And so countries like Indonesia and Mexico either have become, or are becoming, net importers of crude oil. They used to be huge exporters. Countries like Saudi Arabia are holding the production steady only because they still have Ghawar which produces roughly half of what they produce. Ghawar is a very mature field. By some estimates it already produced 60 percent of the oil in place, which is a marvelous result. However, that means that it doesn’t have a bright multi-decadal future. You take out 4 million barrels of oil per day from one oil field, believe me, you cannot replace it with all the tar sands in the world and all unconventional oil. That’s the problem that we have.
TO: There’s a bipartisan obsession in the US with quote-unquote energy independence. Typically that means, I guess, trying to produce as many fossil fuels domestically as possible and at the same time moving toward alternatives – whether those are bio-fuels or renewable energy. Do you think that’s a pipe dream?
TP: The answer is a little bit more complicated than saying it’s a pipe dream. On many levels, that’s pure idiocy, not a pipe dream. So let’s get that straight. However, the U.S. can’t possibly become energy sufficient in its current state. There’s no way we can ever do that. That’s a pipe dream. However, if we are responsible not only should we be looking at producing things locally, but also we must be looking very hard at using these fuels much more wisely, which is not the case in the U.S. The discussion we are having is completely off – that is, we talk about energy, we don’t talk about power. We talk about replacing high power-density sources such as crude oil, natural gas and coal with dilute, very low-power resources such as photovoltaics or wind turbines. And we’re saying that therefore our problem is solved. Well, it isn’t, not by a long stretch. In the meantime we are forgetting that in order for these turbines or photovoltaics, or geothermal or so many other things to become even remotely viable as an alternative we have to use less power and we’re not doing anything about it, or hardly anything.
Let me give you one bloody simple example that really irks me. In Texas, the last I checked, we have a lot of sun, right? So why don’t we just have passive solar heaters on every roof on every freestanding house to heat up the water for showers and cooking, and then during winter for warming up the house? That solution alone would save us 5 to 10 percent of the primary energy in the US and it costs nothing to put one up on your roof.
(I shouldn’t say nothing – right now I’m doing it, they want to charge me 5k and since I don’t live in Austin I won’t get a nice $3,000 offset from Austin Energy but that price, $5,000, is two times too high for what it costs to make with a decent profit, so it’s just scalping right now.)
Why aren’t we in Texas coming up with these alternatives, which are cheap, simple, technologically unsophisticated and have a very high impact. Why is that the case? Because we don’t have the public discourse, which is telling us that power, our use of power, should be of everybody’s concern. Au contraire, what we are hearing is [energy pundit and Peak Oil pooh-pooher] Daniel Yergin and other people who are giving us soothing for which they are paid exorbitant amounts of money and who are telling us, ‘Don’t worry, we’ll take care of you’, and that’s just wrong.
TO: To switch gears just a bit. Corn ethanol, I think most people would say is just simply not a panacea to fossil fuels and we could possibly say much worse things about it. But what about these second-generation bio-fuels? Texas A&M is trying to develop sorghum as a possible bio-fuel, for example. There’s also switch grass, algae, sugar cane, other sources – do those hold out some promise?
TP: Very little promise and huge environmental cost. … I can tell you that most notions surrounding bio-fuels of whatever generation and of whatever source are simply misconceptions and again, pipe dreams, wishful thinking. It’s a sort of social escapism, where we want to believe in some fairy tale, and therefore we do, and truth be damned.
Any biofuel from whatever source is a prescription and a mandate for extremely high water use. That’s number one. Including Texas sorghum, which just happens to be above the Ogallala Aquifer. … How many gallons of water per mile-driven are we going to use? And it’s a lot; it’s hundreds of times more than for fossil fuels.
Two, it’s soil. Some sources are worse than others… Corn is particularly not good because of erosion (so is sorghum, soy beans). Switch grass would not be as bad but the problem with things like switch grass is that Mother Nature has worked for about 3.5 billion years to construct an almost indestructible cellulose with these glucophilic bonds that are extremely difficult to break. Yes, you can break them and we do it every day with lots of energy. But if you want to break them at a low energy expenditure, your rate is going down.
Your power generated from the source is going down so they are far less efficient than the simple starch sources such as corn or glucose sources like sugar cane.
You add all of that up and the pipe dreams of people who think they’re environmentally sound and they think they’re clean and nice in fact are doing some of the dirtiest things possible on this planet.
TO: You paint such a hopeless and pessimistic picture…
TP: No, I don’t. No, I don’t. I’m just trying to be realistic, you see, the thing again – since we have a very loose relationship to the truth and reality, we are unwilling to face reality, instead we are telling lies to one another, right? We call it optimistic and positive attitude, when somebody’s trying to tell you the truth you call them pessimistic and a dark picture. Well how about something else: we live within our means, we spend what we have and then if we have an excess of it we devote it to something else. Now how is that for a novel way of living?
TO: Do your views get you in trouble with your colleagues in the petroleum department?
TP: Where it really gets me into trouble is where people are absolutely naïve, do not understand notions of energy and power, do not know how you produce energy and power, and have absolutely unrealistic expectations and are absolutely narcissistic at the same time.
TO: You might be describing, what, about 80 percent of Americans?
TP: No, 95.
TO: Any final thoughts?
TP: We need to start having an adult, honest, public discourse of the sort that I have not seen in our country for the last 20 years. The time is coming when we have realized our ventures into real estate and into financial engineering have led us to a disaster and that is because we have based our hope on something that is imaginary – imaginary money. So it’s a good time when people realize they have to come back to reality from this sort of drug trip that we had on imaginary things.
So I think if we had anybody who is serious and responsible in our government, and few such people do exist, and others outside of government because I don’t think we can actually count on government doing too many things, it’s too besieged by everybody these days. In the end it’s up to us – each individual to ask ourselves what I can do myself without the government programs, without massive resources and subsidies, so that I use less energy and live a better life. And what’s wrong with that?