Chapter 2Deteriorating Oil and

Food Security

Yen Ha & Jessica Hallenbeck

CORE: Human Population

Part I

Crude Oil

The Demand For Oil

Our society has become an oil-based civilization

Cars, trains, planes Urbanization: cities, suburbs

There has been an annual increase of about 1% for the world’s demand for oil

2005-2006= 0.77% increase 2006-2007= 1% increase Third straight year that annual

growth is less than 2% The world currently consumes 85.7

million barrels/day in 2007 The leading country: United States 1972- 1 bushel of wheat= 1 barrel

of oil 2007- 8 bushel of wheat= 1 barrel

http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption

Top 25 Countries of Oil Consumption

* http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption

Annual Growth Rate of Oil United States

Unchanged within the past three years with an average of 20.7 million barrels/day

China 5.5% increased

from 2006-2007 Currently

consumes 7.7 million barrels/day

The huge increases in Asia and China over the last four decades are very clear.

http://wolf.readinglitho.co.uk/mainpages/consumption.html

Available Oil

Estimated 2 trillion barrels of oil are available in the world

However, 1 trillion has already been harvested Easy oil: close to shores, near the surface,

large reservoirs Tough oil: off shores, deep underground,

difficult to find Energy Information Administration of the U.S.

Department of Energy estimates that there still are 1.28 trillion barrels of oil reserves available in the world

Available Oil Cont… Cambridge Energy Research

Associates (CERA) have found in 2006 that there is an estimate of 3.74 trillion barrels of oil remaining in the world

• This could raise questions of new technologies, geopolitical conflicts, and economics to find these new frontiers

http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=8444

Measuring the Decline of Oil

Computer Models Analysis of Reserves and Production

Relationship Separate the World’s Oil Production

Countries into 3 groups

Computer Models

Projects future oil production and prices based on the past

http://www.eia.doe.gov/steo

http://www.eia.doe.gov/steo

Reserves and Production Relationship

Look to see future production trends M. King Hubbert (US Geological Survey) predicted the

production peak based on the time between new discoveries Used the information that the US had new discoveries in

1930 Estimated that the US oil production would peak in 1970

http://tonto.eia.doe.gov/dnav/pet/hist/mcrfpus1a.htm

Separating the World

Group 1: Falling productionUnited States, Venezuela, United

Kingdom, Norway Group 2: Rising production

Russia, Canada, Kazakhstan, Algeria, Angola, Brazil, Nigeria, Qatar, United Arab Emirates, Libya

Group 3: Verge of a downfall in productionSaudi Arabia, Mexico, China

Separating the World cont.

• The predictions for many of the countries are true

•Countries that have already peaked (US, Venezuela, UK, Norway)

•BUT how about…

•Saudi Arabia, Mexico,China, Libya

• For the most part, categorizing these countries are inaccurate at the true representation of their oil production

http://www.worldoil.com/INFOCENTER/STATISTICS_DETAIL.ASP?STATFILE=_WORLDOILPRODUCTION

Problems With Discovering New Oil

95% of the oil in the world has already been discovered Due to the lack of exploration and new discoveries suggests that oil companies are

agreeing to this fact Husseini (former head of exploration at Aramco) claimed that it’s impossible

to discover enough new oil reserves to compensate for all the oil demand Need enough to cover the 2 million barrels/day increase of oil demand each year Also need enough new oil to cover for the declining 4 million barrels/day from old

oil reserves International Energy Agency (IEA) claims that the demands of 2007 (84.75

mbpd) cannot even reach the oil production of 2006 (85.01 mbpd) Currently, 2007 has produced 85.7 million barrels per day

18 of the top 20 oil reserves were discovered in the 1970’s None of the new oil reserves found within the past decade made the top 20

However, if the CERA is correct in its claims about the 3.7 trillion of oil that still remains means that we have NOT discovered most of the oil available on this earth

Plus, the annual increase of oil consumption has not increased 2 million barrels/day within the past 3 years

Hubbert’s Peak Utilizes a bell-shaped curve to predict the oil

production for the future Use the patterns seen from 1992-2006 to

predict for 2006-2020 1992: 67 million barrels/day 2006: 85 million barrels/day (18 mbpd increase) 2020: 67 million barrels/day

• Would require a 21% drop within this 14 years period

• Nevertheless, with an increase of 1% oil consumption annually, we would need to produce 106 million barrels/day to meet the needs of consumers

Critics of Hubbert’s Peak Jerome R. Corsi:

Argues that we are constantly finding new oil reserves so the idea of us completely running dry of oil by 2050 is impossible

In September of 2006, ExxonMobil claimed that oil in place estimates to about 6-8 trillion barrels per day and 3 trillion barrels per day in oil shale deposits

Others The peak of 2006 is lower than the oil production of

2008 Estimates of oil productions are expected to

increase within the next years

Actual Hubbert’s Peak•Hubbert’s Peak falls short of prediction

•2006 was not the peak of oil production since production in 2008 has surpassed it

•This shifts the prediction curve

http://www.theoildrum.com/files/PU200808_Fig3b_0.png

Actual Hubbert’s Peak Cont.

Furthermore, the United States is estimated to increase its production within the next two years according to Energy Information Administration

- This dramatic decrease in oil production after the peak of 2006 is yet to be seen

http://www.eia.doe.gov/steo

Other Options for Oil The remaining 5% of the oil is in the Artic

Which country controls which parts? Problems:

• Wars, environmental regulations, devastation to the ecological systems

Tar sands—products of oil shale Canada has an estimate 1.8 tbpd but only 300 bbpd can be

recovered Venezuela has 1.2 tbpd but only 400 bbpd can be recovered Problems:

• Extremely hazardous to the environment: heating, need lots of natural gas, carbon-intensive

• 2 tons of sand= 1 barrel of oil• Extremely costly: takes 2 barrels out of 3 barrels to pay for the

costs

Other Options Cont…

Oil Shale: conversion of kerogen, an organic material, into oil and gasColorado, Wyoming, UtahProblems:

• Requires several barrels of water= one barrel of oil

• Very costly, climate destruction, time

Problems with Declining Oil

High demand and low supply IEA estimates that by 2030,

we will need 120 million barrels/day to meet our consumer needs in the US

We do not change Industries still continues to

make cars, airplanes, food, ect. as if the oil will continue to last

http://www.marktaw.com/culture_and_media/politics/GlobalOilImages/productionandconsumption.gif

Problems Cont… Growth of modern cities

400 cities, 20 mega cities with more than 10 million people Requires lots of oil for transportation, operation of large buildings,

new technologies, ect. Garbage—needs to go longer distances as the cities grow larger

which requires more oil and higher costs Suburbs

People need to commute to work Highly dependent in the US where most people still transport

using cars rather than public transits Shopping malls, Wal-Marts, roads

Bottom line INC in oil prices= INC in cost of food= INC in everything else Without oil, we will no longer be able to travel far distances, get

fresh produces, and have our luxurious lifestyles

Reality of Oil Consumption

http://maps.grida.no/go/graphic/world_oil_consumption

Part II

Food and Oil Since 1950

Cheap Oil Boosts Food Production

World grain harvest quadrupled last century.

1950-1972: 1 bushel of wheat =1 barrel of oil on the world market = $2

2007: 8 bushels of wheat = 1 barrel of oil

•When oil >$60, becomes cheaper to convert food crops to oil

"What is driving oil prices so high?", BBC (November 5, 2007).

World Grain Harvest

1950: 630 million tons Now: 2 billion tons Productivity (with little new land) tripled due

to: Tripling of Irrigation 10 times more fertilizer used High yield crops

• Hybrid corn in US• Dwarf wheat and rice in Asia

World farmland

According to satellite imagery, 15 million km2 of farmland in 2000.

New farmland has been created, but much farmland is lost to urbanization and overuse.

Food prices are going up to equal oil prices 2006: In US, 16%

food crops to oil

In 2008, 30% use projected by Lester Brown

2007: According to the USDA projections the share of ethanol in total corn use will rise from 14% in 2005/06 to 31% in 2016/17.

Image fromNew York Times Jan 19, 2008.

Grain Exporters/Importers

Image from Theoildrum.com

Food vs. Population

Grain 1984: 342

kilograms grain/person

2006: 302 kg/person

Why was there no worldwide famine?

Soybean 1984: 68 million

tons 2007: 222 million

tons

US Agriculture Energy:

19% farm energy to pump water.2/3 of agriculture energy used by

transportation.7% of agriculture energy used in

packaging –more energy for packaging than the food contains.

Refrigeration

Refrigeration uses the most energy in the food industry.

Energy Star models use 50% less energy than those made before 1993.

Up to 4kWh per day.

QuickTime™ and aTIFF (Uncompressed) decompressor

are needed to see this picture.

Image from wikipedia.com

The US has become more energy efficient

Year Gallons of Fuel Gallons of Fuel per Ton of Grain

1973 7.7 billion 33

2005 4.2 billion 12