Peak OilPeak OilThere’s no silver bullet.There’s no silver bullet.

May 2008

Points for the DayPoints for the Day Peak oil is when flows can’t meet the

demand. Peak Oil is probably happening about

now. World exports are starting to drop. Diesel shortages will come first. Transit has a glorious future.

A Short History of Peak OilA Short History of Peak Oil

1956 Hubbert said US to peak in 19701956 Hubbert said US to peak in 1970 1970 US lower 48 peaks – imports begin.1970 US lower 48 peaks – imports begin. 1970’s Lots of oil discovered – all is well.1970’s Lots of oil discovered – all is well. 1998 Geologists start getting worried.1998 Geologists start getting worried. 2007 World conventional production peaks2007 World conventional production peaks

http://www.theoildrum.com/files/World%20oil%20production.png

Analysts Look at the FutureAnalysts Look at the Future Look at rate of depletion of producing Look at rate of depletion of producing

countriescountries Watch the progress of new projects.Watch the progress of new projects. Estimate the demand for oil.Estimate the demand for oil. Calculate the balance.Calculate the balance.

They are saying shortages within They are saying shortages within 3 3 yearsyears. . The IEA in ParisThe IEA in Paris Most of the peak oil analystsMost of the peak oil analysts US DOE is starting to hintUS DOE is starting to hint

Situation in the USSituation in the US

Burning 21 million b/d and holding. Burning 21 million b/d and holding. Importing about 12 million b/dImporting about 12 million b/d Refinery utilization lowRefinery utilization low

Crude stocks average.Crude stocks average. Gasoline stocks high.Gasoline stocks high. Diesel/heating oils stocks low.Diesel/heating oils stocks low.

World exports are slowing.World exports are slowing.

Top World Oil Net ImportersTop World Oil Net Importers Rank Rank Country Country Net ImportsNet Imports

1 1 United States United States 12,22012,2202 2 Japan Japan 5,097 5,0973 3 China China 3,438 3,4384 4 Germany Germany 2,483 2,4835 5 Korea, SouthKorea, South 2,150 2,1506 6 France France 1,893 1,8937 7 India India 1,687 1,6878 8 Italy Italy 1,558 1,5589 9 Spain Spain 1,555 1,55510 10 Taiwan Taiwan 942 94211 11 Netherlands Netherlands 936 93612 12 Singapore Singapore 787 78713 13 Thailand Thailand 606 60614 14 Turkey Turkey 576 57615 15 Belgium Belgium 546 546

What is going to happen?What is going to happen?

Fuel prices are going up and up!Fuel prices are going up and up! Think $5 gasoline, possibly $6 soon.Think $5 gasoline, possibly $6 soon.

Spot shortages possible anytime from Spot shortages possible anytime from disruptions (political, hurricanes)disruptions (political, hurricanes)

Permanent diesel shortages likely first.Permanent diesel shortages likely first. Europe, China, India, power shortages.Europe, China, India, power shortages.

There is no obvious way to avoid this.There is no obvious way to avoid this.

Prices and TransitPrices and Transit

Cost of fuel going way up.Cost of fuel going way up. Airlines already in big trouble Airlines already in big trouble

Demand for transit is increasing.Demand for transit is increasing. How fast? $5, $10, $20, a gallon or shortages?How fast? $5, $10, $20, a gallon or shortages?

The diesel shortage problem.The diesel shortage problem. A working fuel.A working fuel. Rationing.Rationing.

A Sudden ShortageA Sudden Shortage A few days or semi-permanent?A few days or semi-permanent?

5% shortfall will cause havoc (Think 1970s).5% shortfall will cause havoc (Think 1970s). Gas lines = government interventionGas lines = government intervention

Rationing Rationing Car poolsCar pools Extended work schedulesExtended work schedules

Transit Transit Rapid expansion – hours, routesRapid expansion – hours, routes Equipment.Equipment. Non-conventional vehicles Non-conventional vehicles New services.New services.

Or an Evolving CrisisOr an Evolving Crisis Gasoline prices increase by a dollar a Gasoline prices increase by a dollar a

yearyear No lengthy shortages – No rationing.No lengthy shortages – No rationing. Increasing demand for affordable transit.Increasing demand for affordable transit.

Nothing to really trigger government Nothing to really trigger government response.response.

Realization that transit, not more Realization that transit, not more roads is what is needed.roads is what is needed.

Transit after the PeakTransit after the Peak(Life with less internal combustion)(Life with less internal combustion)

In 3-10 years.In 3-10 years. A lot less moving private cars.A lot less moving private cars. A lot less air travel.A lot less air travel. Most still residing in suburbia.Most still residing in suburbia. Most a lot poorer.Most a lot poorer.

Useful assetsUseful assets Lightly used highway lanes.Lightly used highway lanes. Great communications – cell and internetGreat communications – cell and internet Pretty good electric grid.Pretty good electric grid. Lot of unemployed people.Lot of unemployed people.

Transit will have to changeTransit will have to change Diesel will be in short supply & Diesel will be in short supply &

expensive.expensive. Hybrids, natural gas for awhile.Hybrids, natural gas for awhile. Efficiency is the key.Efficiency is the key. Electric vehicles are the future.Electric vehicles are the future. Service suburbia.Service suburbia.

Not dense.Not dense. Goods as well as people.Goods as well as people.